THE CLUB BUNGALOWS AT KUKUI`ULA

PHASE IA

CONDOMINIUM PURCHASE AGREEMENT,

DEPOSIT RECEIPT & CONTRACT

THIS PURCHASE AGREEMENT (“Purchase Agreement”) is made by and between

LODGE HALE DEVELOPMENT, LLC, a Hawaii limited liability company, whose place of

business and post office address is 20645 North Pima Road, #195, Scottsdale Arizona 85255

(hereinafter referred to as “Seller”), and “Purchaser” named in Article II below, and shall be

effective upon the date of execution by Seller (the “Reference Date”), subject to the terms and

conditions set forth herein.

SPECIFIC TERMS AND CONDITIONS

ARTICLE I - DESCRIPTION OF PROPERTY COVERED BY THIS

AGREEMENT

1.1 Unit: Unit number ___ (the “Unit”) in Phase IA of The Club Bungalows at Kukui`ula

condominium project located at Koloa, Island and County of Kauai, as described in the

Declaration and shown on the Condominium Map together with the percentage of interest

in the common elements of the Project set forth in the Declaration, as the same may be

modified from time to time as provided in the Declaration (the “Common Interest”).

The unit floor plan type, number of bedrooms and baths, net living area, area of the

lanai(s) and garden shower for the Unit, and the assigned covered parking stall that is a

limited common element appurtenant to the Unit are set forth under the unit number on

the Schedule of Units for Phase IA attached hereto as Exhibit A.

1.2 Furnishing, Fixtures, Appliances, and Household Goods Included: The furnishings,

fixtures, small appliances, and household goods listed on Exhibit B; provided that if one

or more of the listed items is not available for delivery on or before the Closing, the

Seller reserves the right to substitute another item of similar style and quality (the

“Furnishings”).

ARTICLE II - INFORMATION CONCERNING PURCHASER

2.1 Name, Address and Contact Information of Purchaser:

Name: [Full name, please; no initials]

Address: Res. Phone: Bus. Phone: Email Address: Fax No.:

2.2 Type of Purchaser:

2

Individual. If married, full name of spouse: Will vesting of title include spouse? Yes No

Corporation Limited Liability Company General Partnership

Limited Partnership Limited Liability Partnership

State of organization: Print full name(s) and position(s) of authorized person(s) signing this Agreement: Name: Position: Name: Position:

( ) Trust

Full name(s) of trustee(s) and the full name of the trust: Name of Trustee(s): , Trustee(s) of the [Full name of trust]

Upon request of Escrow but in any event not less than ten (10) calendar days prior to the

Date of Preclosing, as defined in Section 8.2 of the General Terms and Conditions

attached to this Agreement (the “General Terms and Conditions”), Purchaser shall

submit to Escrow: (i) if Purchaser is a corporation, limited liability company, or

partnership, appropriate resolutions authorizing the Purchaser’s purchase of the Unit and

designating the person or persons authorized to execute the Unit Deed, note, mortgage

and other closing documents on Purchaser’s behalf, a copy of the Purchaser’s

organizational documents, and evidence that Purchaser has registered to do business in

the State of Hawaii or is not required to so register; and (ii) if Purchaser is a trustee, a

copy of the trust agreement. PURCHASER ACKNOWLEDGES AND AGREES THAT

IF PURCHASER IS A CORPORATION, LIMITED LIABILITY COMPANY,

PARTNERSHIP, OR OTHER ENTITY THAT IS NOT A NATURAL PERSON,

SELLER MAY REQUIRE, AS A CONDITION TO ACCEPTANCE OF THIS

AGREEMENT, THAT PURCHASER’S OBLIGATIONS UNDER THIS AGREEMENT

BE GUARANTEED BY A FINANCIALLY RESPONSIBLE NATURAL PERSON

WHO IS ACCEPTABLE TO SELLER, IN ITS SOLE DISCRETION.

2.3 Nature of Tenancy:

Severalty (One Purchaser)

Tenants in Common (Two or more persons; no rights of survivorship)

% Purchaser No. 1

% Purchaser No. 2

% Purchaser No. 3

Joint Tenants (Two or more persons with rights of survivorship)

Tenants by the Entirety (Husband and wife, reciprocal beneficiaries or partners

pursuant to a civil union with rights of survivorship)

3

To be determined

Title shall vest exactly as follows:

If Purchaser fails to designate the nature of tenancy at least ten (10) days prior to the Date

of Preclosing, Purchaser, if a sole owner, will take title as a tenant in severalty; multiple

Purchasers other than married couples will take title as tenants in common; Purchaser, if

a married couple, will take title as tenants by the entirety. If Purchaser consists of more

than one married couple, the individuals in a married couple will take title as tenants by

the entirety as to each other, and each married couple will be a tenant in common with

every other couple, individual, corporation or partnership. Whenever a couple, individual,

corporation, limited liability company, or partnership takes title with another couple,

individual, corporation, limited liability company, or partnership as tenants in common,

each tenant in common will take an equal interest, unless otherwise specified. If after

designating Purchaser’s tenancy, Purchaser elects to change the tenancy so designated,

Purchaser shall bear all costs (if any) to change such tenancy, including without

limitation, any costs to redraft the Unit Deed.

ARTICLE III - PURCHASE PRICE, METHOD OF PAYMENT AND ESCROW

3.1 Unit Price (including Furnishings): $___________________

Purchase Price: $___________________

3.2 Method of Payment:

All cash

Cash down payment and Mortgage Loan (but the purchase is NOT subject to

Purchaser obtaining a Mortgage Loan)

Payment A: $ 25,000.00 . Deposit payable upon execution of this Agreement by

Purchaser (the “Initial Deposit”).

Payment B: $ . Deposit of ten percent (10%) of the Purchase Price (less

the Initial Deposit) payable thirty (30) days after the execution of this Agreement by

Purchaser (the “Second Deposit”).

Payment C: $ . Deposit of ten percent (10%) of the Purchase Price

payable: [check applicable box]

within two (2) weeks after Seller’s written notice to Purchaser that Seller

anticipates construction of the site work for Phase IA to commence within

thirty (30) days.

thirty (30) days after Seller has executed this Agreement.

4

Payment D: $ . Deposit of ten percent (10%) of the Purchase Price.

[check applicable box]

within two (2) weeks after Seller’s written notice to Purchaser that framing

of the Unit is substantially complete.

thirty (30) days after Seller has executed this Agreement.

Payments C and D, together with the Initial Deposit and the Second Deposit, is

herein called the “Deposit”.

$_______________ of the Deposit shall be applied as a down payment on the

Furnishings. By initialing below, Purchaser consents to the use of Deposit funds for

the down payment on Furnishings and irrevocably instructs Escrow to distribute

the funds accordingly.

PURCHASER’S INITIALS:

Final Payment: $______________. The remaining balance of the Purchase Price

(the “Final Payment”), payable by Purchaser on the Date of Preclosing, provided that if

a portion of the Final Payment is being paid from the proceeds of the Mortgage Loan (as

defined in Section 7.4(a) of the General Terms and Conditions) the proceeds from the

Mortgage Loan shall be paid not less than two (2) business days prior to the Scheduled

Closing Date.

PURCHASER UNDERSTANDS AND AGREES THE PURCHASER’S DEPOSIT

MAY BE USED TO PAY COSTS OF DEVELOPMENT AND CONSTRUCTION

OF THE PROJECT PRIOR TO CLOSING IN ACCORDANCE WITH CHAPTER

514B OF THE HAWAII REVISED STATUTES.

NOTE: The Deposit may be made by personal, cashier’s or certified check, made

payable to TITLE GUARANTY ESCROW SERVICES, INC. (“Escrow”). With respect

to all sums due under this Agreement, including without limitation, the Final Payment,

Hawaii law requires, as a general rule, that prior to releasing documents for recordation

or disbursing funds, escrow must have received good funds, which includes cash, wired

funds or final settlement of a cashier’s check. Escrow will furnish wiring instructions not

less than five (5) calendar days prior to the Date of Preclosing.

3.3 Additional Sums to be Paid by Purchaser at Preclosing:

On the Date of Preclosing, Purchaser shall pay to Escrow:

(a) Community Association Capital Start-Up Fee in an amount specified in Exhibit C;

5

(b) Plantation Membership Initiation Fee payable to The Club in an amount specified in

Exhibit C;

(c) Project start-up fee in an amount equal to two (2) months’ estimated maintenance fees

for the Unit, estimated to be the amount specified in Exhibit C but the actual amount of

which will be determined and provided to Purchaser prior to the Date of Preclosing; and

(d) Closing costs and prorations payable by Purchaser, as estimated by Escrow (including

portions of any annual or monthly fees payable to the Community Association, The Club

and the Association).

The total of the amounts described in items (a) thru (d) above are referred to herein as the

“Estimate of Additional Sums Payable”. If Escrow shall determine prior to the Closing

Date that additional amounts are due to fully pay closing costs and prorations, then

Purchaser shall pay the additional amounts to Escrow not less than two (2) business days

prior to the Closing Date or, if earlier, within five (5) calendar days of Purchaser’s receipt

of such notice from Escrow. If any excess amounts are prepaid by Purchaser with respect

to closing costs and prorations, then such excess amounts shall be refunded to Purchaser

by Escrow within a reasonable amount of time after the Closing Date.

3.4 Escrow:

TITLE GUARANTY ESCROW SERVICES, INC.

235 Queen Street

Honolulu, Hawaii 96813

ARTICLE IV – EFFECTIVENESS OF AGREEMENT

4.1 Acceptance by Seller. The signature of the Project Sales Agent on this Agreement only

acknowledges receipt of the Initial Deposit paid with this Agreement and does not

constitute acceptance by Seller. This Agreement shall not be deemed accepted and shall

not be of any force and effect until it has been executed by Seller and delivered to

Purchaser. If Seller does not so accept, in its sole discretion, this Agreement shall not

take effect and all funds Purchaser has deposited with Seller shall be promptly refunded

to Purchaser. Seller’s sales representatives are not authorized to accept this offer.

Receipt and deposit of Purchaser’s funds do not constitute Seller’s acceptance of this

offer. Seller may, but shall not be obligated to, hold Purchaser’s deposit check uncashed

until Seller accepts this Agreement and then deposit the check with Escrow. When

accepted by Seller, this Agreement constitutes the sole contract between Purchaser and

Seller regarding the purchase of the Property. There are no collateral understandings,

representations or agreements, oral or written, other than those contained herein. NO

SALES REPRESENTATIVE, EMPLOYEE OR OTHER AGENT OF SELLER HAS

THE AUTHORITY TO MODIFY THE TERMS OF THIS AGREEMENT OR TO

MAKE ANY AGREEMENTS, REPRESENTATIONS OR PROMISES ON BEHALF

OF SELLER. THEREFORE, ALTHOUGH PURCHASER HAS HAD, AND IN THE

FUTURE MAY HAVE, CONVERSATIONS WITH SALES REPRESENTATIVES,

EMPLOYEES OR OTHER AGENTS OF SELLER, NONE OF THE INFORMATION

CONTAINED IN SUCH CONVERSATIONS INCLUDING REPRESENTATIONS,

PROMISES OR STATEMENTS OF ANY KIND SHALL BE BINDING UPON

6

SELLER UNLESS THE SAME ARE ADDED BY WRITTEN ADDENDA

ATTACHED HERETO AND EXECUTED BY PURCHASER AND SELLER.

PURCHASER’S INITIALS:

4.2 Conditions for Binding Agreement.

Statutory Requirements to Bind Purchaser. This Agreement will not be binding upon

Purchaser unless and until: (i) Seller has delivered to Purchaser a copy of the Public

Report and all amendments with an effective date issued by the Real Estate Commission

of the State of Hawaii (the “Commission”) together with all documents as required by

§514B-86(a)(1)(A) of the Hawaii Revised Statutes, as amended (“HRS”), (ii) Seller has

delivered to Purchaser a notice of Purchaser’s thirty-day cancellation right, and (iii)

Purchaser has waived or is deemed to have waived Purchaser’s right to cancel as more

particularly provided in HRS §514B-86. Prior to the time this Agreement becomes a

binding sales contract, this Agreement may be cancelled at any time, with or without

cause, at the option of Purchaser, by written notice of such cancellation delivered to

Seller. Seller waives any right it may have to cancel this Agreement under HRS §514B-

86, it being the intent that this Agreement shall be fully binding in accordance with its

terms unless Purchaser exercises its right to cancel under HRS §514B-86.

In the event of any cancellation as provided above, Seller shall cause Escrow to

refund all payments previously made by Purchaser, together with any accrued interest

thereon to the extent provided in Section 7.3 of the General Terms and Conditions, and

neither party shall have any other or further liability hereunder or with respect to the

Project; provided that Escrow shall deduct from the refund to Purchaser the escrow

cancellation fee and all other costs associated with the purchase up to a maximum of

$250.00 (collectively, the “Cancellation Costs”).

4.3 Public Report, Property Report, Project Documents and Governing Documents.

Purchaser acknowledges that Purchaser has received a copy of the Public Report for the

Project and amendments thereto, if any, for which an effective date has been issued by

the Commission prior to signing this Agreement. Purchaser also acknowledges that

Purchaser has been provided with and agrees to read and review a copy of the

Declaration, the Bylaws, the House Rules, the Condominium Map, the form of the Unit

Deed, the Escrow Agreement, and any amendments to such documents (herein

collectively referred to as the “Project Documents”), the Governing Documents (as

defined below) and the Master Disclosure Statement (as defined in Section 10.1 below).

Purchaser agrees that all of said documents are incorporated in and are a part of this

Agreement. Purchaser further acknowledges that Seller has informed Purchaser that a

full size copy of the Condominium Map is on file at Project Broker’s office and that

Purchaser has been provided with a reasonable opportunity to examine the same.

Purchaser’s failure to cancel this Agreement within the 30-day cancellation period

described in Section 4.2(a) will constitute Purchaser’s approval and acceptance the terms

of all of said documents.

7

4.4 Governing Documents. As used herein, “Governing Documents” means and includes

the following as they may be amended, amended and restated, or supplemented from time

to time:

(a) The Articles of Incorporation, the Bylaws, the Resolutions of the Board of Governors,

if any, and the Standards of the Community Association;

(b) The Bylaws of The Club at Kukui'ula, adopted on August 10, 2005 as amended and

restated by the Amended and Restated Bylaws of The Club at Kukui’ula adopted on

September 4, 2012 as amended by the First Amendment to the Amended and Restated

By-laws of the Club at Kukui`ula adopted on August 5, 2015; The Amended and

Restated Club Rules for The Club at Kukui`ula effective September 4, 2012; The Club at

Kukui‘ula Schedule of Membership Fees; and The Club at Kukui‘ula Membership

Agreement (requiring the choice, if applicable, to request additional golf use privileges

thereby triggering a Golf Initiation Fee and Golf Membership assessments);

(c) The Community Charter for Kukui’ula dated May 8, 2006, as amended and restated

by instrument dated September 4, 2012, recorded in the Bureau as Document No. A-

46320954, as amended by Amendment to the Community Charter for Kukui‘ula dated

February 12, 2013, recorded in the Bureau as Document No. A-47991323, and all

Supplements thereto, as amended, restated, replaced and superseded by instrument dated

August 5, 2015 and recorded (collectively the “Community Charter for Kukui`ula” or

“Charter”), which imposes upon the Property and other real property, under a general

plan of development, certain covenants, conditions, restrictions, easements, servitudes

and other provisions running with the land and binding title to the Property and all

owners of any portion thereof or interest therein, whether or not referenced in any future

deed or instrument;

(d) The Covenant for The Club at Kukui'ula ("The Club") dated May 8, 2006, as

amended and restated by instrument dated September 4, 2012, recorded in the Bureau as

Document No. A-46320955, and all supplements thereto, as amended, restated, replaced

and superseded by instrument dated August 5, 2015 and recorded in the Bureau as

Document No. A-56951010 preserving in effect all Supplements (collectively, the

“Covenant”), which guides the entity responsible for owning, maintaining, promoting

and overseeing the recreational facilities and amenities and managing programs offered

within Kukui`ula and imposes upon Purchaser, subsequent owners, the Property and

other real property certain provisions relating to The Club and property and facilities

owned by The Club;

(e) The Design Guidelines and any Supplemental Design Guidelines containing design

standards and architectural and aesthetic guidelines adopted pursuant to Chapter 5 of the

Charter that govern new construction and modifications to units within Kukui`ula,

including structures, landscaping, and other features on units (generally, those features on

or visible from the exterior of the Unit) and which may include specific or supplemental

design guidelines for the Project (collectively, the “Design Guidelines”); and

(f) Any other “Governing Documents” as defined in Table 1.1 of the Charter.

8

4.5 Agency Disclosure.

KUKUI’ULA REALTY GROUP LLC (“PROJECT BROKER”) REPRESENTS

SELLER AND DOES NOT REPRESENT YOU AS PURCHASER. BY INITIALING

BELOW, PURCHASER AND SELLER CONFIRM THAT ORAL OR WRITTEN

DISCLOSURE OF SUCH REPRESENTATION WAS PROVIDED TO THEM

BEFORE THE SIGNING OF THIS AGREEMENT.

CHECK AS APPROPRIATE:

PURCHASER NOT REPRESENTED--AGENCY DISCLOSURE. Purchaser is not

represented by an independent licensed real estate agent. Purchaser may obtain

representation at Purchaser’s expense.

_________ _________ _________ _________ _________ _________

Purchaser's Initials Seller’s Agent Initials Seller's Initials

PURCHASER AGENCY REPRESENTATION AND REGISTRATION. Purchaser

is represented by an independent licensed real estate agent. The agent has been registered

with the Project Broker and is listed below:

______________________________ ________________________________

Purchaser Agent Company Purchaser Agent Name

_________ _________ _________ _________ _________ _________

Purchaser's Initials Seller’s Agent Initials Seller's Initials

4.6 Execution of Agreement. By execution of this Agreement, Purchaser and Seller agree

to all of the terms and conditions set forth in the Specific Terms and Conditions, all of the

terms and conditions set forth in the General Terms and Conditions, and all Exhibits

attached hereto. PURCHASER ACKNOWLEDGES HAVING READ ALL OF THE

TERMS AND CONDITIONS SET FORTH IN THE SPECIFIC TERMS AND

CONDITIONS AND IN THE GENERAL TERMS AND CONDITIONS.

4.7 Exhibits. The following are attached as Exhibits to this Agreement:

Exhibit A: Schedule of Units for Phase IA

Exhibit B: List of Furnishings

Exhibit C: Assessments and Fees

Exhibit D: Purchaser Acknowledgement of CFD Special Tax

Exhibit E: Warranties and Limitations on Warranties Disclosure

Exhibit F: Non-Investment Addendum

REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE

FOLLOWS ON THE NEXT PAGE

9

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the dates set

forth hereinbelow.

“PURCHASER”

Name/Title (if applicable) Date Name/Title (if applicable) Date

Name/Title (if applicable) Date Name/Title (if applicable) Date

“SELLER”

LODGE HALE DEVELOPMENT, LLC, a Hawaii limited liability company

By CSE Hawaii Development, LLC, a Delaware limited liability company

Its Administrative Member

By CSE & Associates, Inc., an Arizona corporation

Its Manager

By Reference Date:

Name:

Title:

Receipt of Purchaser’s $25,000.00 (Payment A)

acknowledged this _____ day of __________________, 20__ by:

KUKUI`ULA REALTY GROUP LLC

Sales Agent Signature

Sales Agent (Printed Name)

1

GENERAL TERMS AND CONDITIONS

ARTICLE V – DEFINITIONS

5.1 “AGREEMENT” means this Condominium Purchase Agreement, Deposit Receipt &

Contract, together with any exhibits attached hereto and described in Section 4.7.

5.2 “ASSOCIATION” means the Association of Unit Owners of The Club Bungalows at

Kukui`ula, the unit owners association created pursuant to the Declaration.

5.3 “BOARD OF DIRECTORS” means the governing body of the Association.

5.4 “BOARD OF GOVERNORS” means the governing body of the Community Association.

5.5 “BUREAU” means the Bureau of Conveyances of the State of Hawaii.

5.6 “BYLAWS” means the Bylaws of The Club Bungalows at Kukui`ula recorded in the

Bureau as Document No. A51650728.

5.7 “COMMUNITY” or “KUKUI`ULA” means the master planned resort community

including all property subject to the Charter located on the south shores of the Island of

Kauai of which the Project is a part.

5.8 “COMMUNITY ASSOCIATION” or “KUKUI`ULA COMMUNITY ASSOCIATION”

means the nonprofit Hawaii corporation created to own, operate and/or maintain parks

and trails, primarily non-recreational features, common property and community

improvements and to administer and enforce the Governing Documents, restrictions and

standards established for Kukui`ula.

5.9 “CONDOMINIUM MAP” means Condominium Map No. 5254 for the Project, as the

same has been or may hereafter be amended from time to time. The Condominium Map

is intended only to show the layout, location, unit numbers and approximate dimensions

of the units, approximate elevations of the Project, parking plans, and any other detail

that is specifically required to be shown pursuant to H.R.S. Section 514B-33. The

Condominium Map is not intended to be and does not constitute a representation or

warranty by Seller that Seller will construct or install any improvements, amenities or

facilities which may be depicted thereon nor as a representation and warranty by any

person as to any other matter whatsoever.

5.10 “DECLARATION” means the Declaration of Condominium Property Regime of The

Club Bungalows at Kukui`ula, recorded in the Bureau as Document No. A51650727 as

the same has been or may hereafter be amended from time to time.

5.11 “ESCROW” means Title Guaranty Escrow Services, Inc., whose address is 235 Queen

Street, Honolulu, Hawaii 96813.

2

5.12 “ESCROW AGREEMENT” means the Escrow Agreement executed by Seller and

Escrow, covering the sale of the Property, as the same has been or may hereafter be

amended from time to time.

5.13 “GOLF CLUBHOUSE” means the clubhouse facility built for use by members, guests

and visitors using the Golf Course.

5.14 “GOLF MEMBERSHIP” means a membership created by separate agreement with The

Club that allows the member to use the Golf Course.

5.15 “HOUSE RULES” means The Club Bungalows at Kukui`ula House Rules, as the same

has been or may hereafter be amended from time to time.

5.16 “LODGE RENTAL PROGRAM” means a rental program operation in the Community

which is a short term rental program including one-night rentals that is operated by The

Parrish Collection, LLC.

5.17 “PHASE IA” means units 3 through 7 of the Project, as described in the Declaration.

5.18 “PROJECT” means the planned condominium regime known as The Club Bungalows at

Kukui`ula as described in Section 6.1.

5.19 “PROPERTY” means all of the property described in Section 6.2.

5.20 “PURCHASER’S LENDER” means a financial institution or other institutional lender

authorized to make mortgage loans in the State of Hawaii, and selected by Purchaser to

finance this transaction.

5.21 “SPATIAL UNIT” means the spatial unit owned by KDCH but contemplated for use as

future phases of the Project.

5.22 “THE CLUB” means The Club at Kukui`ula, created as a vehicle for owning, operating,

maintaining, promoting and overseeing recreational facilities and amenities and

managing community programs within Kukui`ula.

5.23 “UNIT DEED” means the legal document Purchaser and Seller will sign to transfer fee

simple ownership of the Property to Purchaser.

5.24 “WARRANTIES” means collectively the warranties provided to Purchaser by Seller (or

third parties) as set forth in Exhibit E.

ARTICLE VI – PROPERTY TO BE CONVEYED

6.1 Project Information.

(a) The Club Bungalows at Kukui`ula. The Property is located in the Project known as

The Club Bungalows at Kukui`ula which is being developed and constructed in phases.

The Project consists of twelve (12) units, one of which is the Spatial Unit. Phases IA and

3

IB, which are the only phases currently being constructed, consist of eleven (11)

residential units. The Spatial Unit may be modified to enable the construction of future

phases. Ultimately, the Project may include approximately 35 residential units. The

Project consists of the land (herein “Parcel FF”) as described in Exhibit “A” to the

Declaration, and any improvements located thereon. THE SELLER HAS RESERVED

BROAD RIGHTS TO MODIFY THE PROJECT. WITHOUT LIMITATION,

THE SELLER RESERVES THE RIGHT TO CONSTRUCT OR NOT

CONSTRUCT PHASE IB, TO ADD OR NOT ADD ADDITIONAL PHASES, AND

TO MODIFY THE NUMBER AND TYPES OF UNITS IN ANY PHASE,

INCLUDING THE MODIFICATION OF ANY UNSOLD UNITS IN PHASE IA.

ACCORDINGLY, THERE IS ABSOLUTELY NO GUARANTEE AS TO THE

NUMBER OF UNITS THAT WILL ULTIMATELY BE INCLUDED IN THE

PROJECT OR AS TO THE DESIGN AND TYPES OF UNITS THAT WILL

ULTIMATELY BE INCLUDED IN THE PROJECT, AND THERE IS NO

GUARANTEE THAT EVERY IMPROVEMENT WITHIN PARCEL FF WILL BE

DEVELOPED AS A PART OF THE PROJECT.

(b) Kukui`ula or the Community. The Project is a part of the master-planned resort

development known as Kukui`ula or the Community under development by Kukui`ula

Development Company (Hawaii), LLC (“KDCH”). As currently planned, the

Community encompasses approximately 1,010 acres of land. It is anticipated (though not

guaranteed) that, upon its completion, the Community will include residential,

commercial, and recreational components, comprised of: up to 1,500 residential units

(being a mix of vacant residential lots upon which dwellings will later be constructed,

completed homes which will likely include single-family detached dwellings, attached

units, town homes and multi-family units (including condominiums), and multi-story

buildings of various heights, sizes, and densities); an 18-hole golf course (the "Golf

Course") with golf-related amenities; various recreational facilities; if constructed,

attached or detached units that may be constructed within the Community in the general

vicinity of the Kukui‘ula Plantation House (and which may include residences that are

individually owned and linked into operations of the Lodge Rental Program); retail/office

facilities; maintenance and administrative facilities for the Community Association and

The Club; and various roadways, parks, trails and open spaces.

Purchaser acknowledges that the foregoing paragraph is a disclosure of KDCH's current

plans and is not a commitment or promise by KDCH or Seller that all or any such

improvements will be made. KDCH has reserved the right to make changes from time to

time in the proposed land uses, improvement plans, street patterns and types, architectural

styles and designs, sizes of residences, numbers of lots and homes and other

improvements currently intended to be built in the Community. The character and uses of

the property surrounding and in the vicinity of the Project, within or outside of Seller's or

KDCH’s control, may change. Purchaser hereby consents to all such development and

uses. Purchaser acknowledges that neither KDCH nor Seller makes any representations

or warranties that all or any portion of the Community will be developed, or that any use

or development of the lands adjacent to or in the vicinity of the Property or Project will

be in accordance with the master plan or other plans or depictions for the Community.

Purchaser acknowledges and agrees that Purchaser is not relying upon any agreements,

4

understandings, inducements, promises, representations or warranties, express or implied

contained in any promotional materials used by KDCH for the Community or made by

any sales person, employee or agent of KDCH. Purchaser expressly waives any claim for

damages against KDCH in connection thereto.

6.2 Description of Property. Seller agrees to sell to Purchaser and Purchaser agrees to

purchase from Seller, upon and subject to all of the terms and conditions of this

Agreement: (a). the Property described in Section 1.1hereof, together with all rights and

easements appurtenant thereto, including but not limited to, recorded and unrecorded,

exclusive and nonexclusive easements of record for access purposes, and the

nonexclusive right and easement of use, access and enjoyment in and to the Association

Amenities (as defined in the Charter); and (b) the Furnishings described in Section 1.2

hereof.

The Property shall be sold subject to: (i) all of the terms, agreements, rights, covenants,

conditions, easements, exceptions, reservations, restrictions and other encumbrances of

record or mentioned in this Agreement, the Project Documents or the Governing

Documents; and (ii) nondelinquent taxes and assessments affecting the Property.

6.3 Unit Deed. Seller agrees that on the Closing Date and upon payment by Purchaser to

Escrow of the Purchase Price and Estimate of Additional Sums Payable, as set forth in

Sections 3.1 and 3.3 hereof, respectively, and upon payment of all other sums agreed to

be paid by Purchaser as set forth herein (all of which sums shall collectively be deposited

into Escrow in the form of cash, cashier’s check, or wire transfers at least two (2)

business days before the Scheduled Closing Date or such earlier date as required by

Escrow), Seller agrees to provide to Purchaser a Unit Deed conveying the Property to

Purchaser.

6.4 No Present Transfer. This Agreement shall not be construed as a present transfer of any

interest in the Property, but only as an agreement to transfer in the future.

ARTICLE VII – PAYMENT OF PURCHASE PRICE

7.1 Payment of Purchase Price. Purchaser agrees to pay the Purchase Price set forth in

Section 3.1 above. Any changes to the Purchase Price must be in writing and signed by

Purchaser and Seller.

7.2 Escrow Agreement. Seller has entered into the Escrow Agreement with Escrow,

covering Purchaser’s Deposit, interest on Purchaser’s Deposit (to the extent not otherwise

provided herein), payment of Escrow’s fees (including Cancellation Costs), and receipt,

collection and disbursement of all funds to be paid by Purchaser hereunder. Purchaser’s

failure to cancel this Agreement within the 30-day cancellation period described in

Section 4.2(a) will constitute Purchaser’s approval and acceptance of the terms and

provisions of the Escrow Agreement, assumption of the benefits and obligations set forth

therein, and agreement of Purchaser to pay Escrow on demand and to indemnify and hold

Escrow harmless as set forth in Paragraph 13 of the Escrow Agreement. Purchaser

hereby irrevocably authorizes and instructs Escrow to comply with the terms of the

5

Escrow Agreement and to disburse all deposited funds in accordance with the provisions

thereof.

7.3 Interest on Purchaser’s Deposits. Purchaser’s Deposit shall be placed in a separate

interest-bearing account, provided that: (a) Purchaser has paid Escrow a fee as provided

in the Escrow Agreement, and (b) Purchaser furnishes Escrow with Purchaser’s social

security or federal identification number. Unless Purchaser defaults under this

Agreement, any interest earned on such interest-bearing account shall accrue to the credit

of Purchaser. If such account is established, upon a refund of Purchaser's Deposit in

accordance with this Agreement, Purchaser shall be entitled to any interest earned

thereon, or, at Closing, any such interest shall be credited to the Purchase Price. In the

absence of such a separate interest-bearing account, Seller shall receive all of the interest

earned on Purchaser's Deposit.

7.4 Purchaser’s Financial Condition/Financing of Purchase.

(a) Purchaser’s Financial Condition. Purchaser represents that Purchaser is financially

capable of making, when due, all of the required payments set forth in this Agreement.

Purchaser further represents that the personal financial data (if any) submitted in

connection with this Agreement to Seller, Seller’s Lender, or any prospective mortgagee

shall be true, complete and accurate. Purchaser agrees to give written notice to Seller

immediately of any material change in Purchaser's financial condition prior to Closing.

Purchaser's failure to notify Seller to the contrary shall constitute a representation by

Purchaser that Purchaser's financial data and condition have not materially changed

before Closing. Seller shall have the right to hold Purchaser in default under this

Agreement and exercise Seller’s rights in accordance with the terms and conditions set

forth in Article XV if any material discrepancies are discovered between any financial

information furnished and Purchaser's actual financial status.

PURCHASER ACKNOWLEDGES THAT SELLER’S LENDER (AS DEFINED IN

SECITON 9.1), AS A MATERIAL CONDITION UNDER ITS CONSTRUCTION

CREDIT FACILITY IN ORDER TO DRAW DOWN FUNDS TO CONSTRUCT ALL

OR PORTIONS OF THE PROJECT, MAY REQUIRE FINANCIAL-RELATED

INFORMATION TO BE SUBMITTED BY PURCHASER, INCLUDING, BUT NOT

LIMITED TO, FINANCIAL STATEMENTS, A SIGNED LOAN APPLICATION,

CREDIT REPORT, BANK STATEMENTS, PAY STUBS, W-2 FORMS, TAX

RETURNS AND OTHER INFORMATION, AND THE PURCHASER, BY PLACING

PURCHASER’S INITIALS IN THE SPACE PROVIDED BELOW, HEREBY AGREES

TO PROVIDE SUCH INFORMATION TO SELLER AND AUTHORIZES AND

CONSENTS TO THE DISCLOSURE OF SUCH INFORMATION TO SELLER’S

LENDER BY SELLER OR PURCHASER’S PROPOSED LENDER.

PURCHASER’S INITIALS ___________

(b) Funds for Purchase. THIS SALE IS NOT CONTINGENT UPON PURCHASER

QUALIFYING FOR AND/OR OBTAINING A LOAN TO PURCHASE THE

PROPERTY. Any and all costs, risks, and requirements associated with obtaining any

6

such loan shall be Purchaser’s responsibility. If Purchaser wishes to finance the purchase

of the Property, Purchaser shall, within ten (10) business days from the Reference Date of

this Agreement, apply to one or more lending institutions for such loan (a “Mortgage

Loan”) and Purchaser agrees to perform all of the following acts (herein called the

"Mortgage Loan Acts"): to use Purchaser’s best efforts to obtain the Mortgage Loan in

good faith; to execute and deliver all necessary documents and disclose all information as

required to obtain the Mortgage Loan; to pay any and all costs, charges and expenses in

connection with the Mortgage Loan; to otherwise promptly and diligently comply with all

requests of the lender and/or Seller to apply for, obtain and close the Mortgage Loan;

and, where deemed necessary by Seller, to make further applications for a Mortgage

Loan. Purchaser shall deliver to Seller a pre-qualification letter in respect of Purchaser’s

Mortgage Loan within ten (10) days following the date by which Purchaser is obligated

to apply for a Mortgage Loan. It is understood that Purchaser may be required to pay a

loan fee for such Mortgage Loan. Purchaser acknowledges and agrees that, although

Seller may have made arrangements with an institutional lender to make financing

generally available for the purchase of units in the Project, Seller makes no representation

or warranty that any such lender will commit to a Mortgage Loan to Purchaser, or, if such

a commitment is made, that the lender will make the Mortgage Loan or that such

Mortgage Loan will be on any specific terms or conditions. It is Purchaser's sole and

complete responsibility to obtain a satisfactory Mortgage Loan. Seller shall have no

obligation to arrange for Purchaser's Mortgage Loan or other financing, and Purchaser

acknowledges and agrees that Seller is not an arranger of credit within the meaning of the

Consumer Credit Protection Act or the rules and regulations promulgated under such

Consumer Credit Protection Act. An executed copy of any loan commitment or rejection

for a Mortgage Loan obtained by Purchaser shall be delivered to Seller immediately upon

its receipt by Purchaser.

(c) Additional Terms For All Cash Purchasers. If Purchaser proposes to pay the

Purchase Price in cash without utilizing a loan, then, if requested by Seller’s Lender,

Purchaser shall, within ten (10) business days after request from Seller, give Seller a

recent financial statement of Purchaser's net worth and cash on hand and such other

written evidence from Purchaser's bankers, accountants, or other persons, as Seller’s

Lender may require, to demonstrate Purchaser's ability to pay the Purchase Price in cash.

Purchaser further agrees to perform all of the following acts (herein called the "Cash

Payment Acts"): to use Purchaser’s best efforts to provide the written evidence

requested; to promptly execute and deliver all necessary documents and disclose all

additional information requested by Seller’s Lender; to pay any and all costs, charges and

expenses in connection with ascertaining Purchaser's ability to pay the Purchase Price in

cash; and to otherwise promptly and diligently comply with all requests of Seller to close

the sale on a cash basis.

(d) Additional Conditions. Seller cannot guarantee the appraised value of the Property.

Purchaser acknowledges that if the appraisal for the Property that is obtained by the

Purchaser’s lender is lower than the Purchase Price, then the Purchase Price will not be

adjusted and Purchaser will be required to provide additional funds to pay the Purchase

Price and to close escrow. Further, Purchaser understands that Purchaser’s Lender is

likely to exclude the purchase price for the furnishings when determining the maximum

7

loan amount and therefor the Purchaser may be required to pay the cost of the

Furnishings in cash. If the amount of the Mortgage Loan is less than the Final Payment

plus the Estimate of Additional Sums Payable, or if the above-referenced appraisal for the

Property is less than the Purchase Price, Purchaser agrees to provide evidence or other

verification to Seller, from time to time as requested by Seller’s Lender, that Purchaser is

financially capable of making such additional payment.

(e) Default by Purchaser. If: (i) Purchaser fails to timely undertake and perform the

Mortgage Loan Acts or the Cash Payment Acts, or (ii) Purchaser has undertaken and

performed the Mortgage Loan Acts but Purchaser's application or eligibility for a

Mortgage Loan is rejected or Purchaser fails to obtain and deliver to Seller a pre-

qualification letter within ten (10) days following Purchaser’s application for a Mortgage

Loan or if such pre-qualification letter, if obtained, expires and is not reinstated within

five (5) days of such expiration, or (iii) Purchaser proposes to pay the Purchase Price in

cash and has undertaken and performed the Cash Payment Acts, and if Seller or Seller’s

Lender, in its reasonable discretion, after reviewing the written evidence submitted by

Purchaser, determines that Seller or Seller’s Lender is not satisfied as to Purchaser's

ability to make such cash payments, then in any of the foregoing events, Seller may elect

to declare Purchaser to be in default of its representations in Section 7.4(a) and exercise

Seller’s remedies in accordance with the terms and conditions set forth in Article XV.

Purchaser acknowledges and agrees that, in view of Seller's financial commitments with

respect to the Project and the nature of the real estate market in Hawaii, the determination

by Seller or Seller’s Lender, as set forth above, that Seller or Seller’s Lender is not

satisfied as to Purchaser's ability to pay the Purchase Price in cash shall be final and

binding, and Purchaser agrees to indemnify Seller for any damages or losses, including

interest and attorneys' fees resulting from Purchaser's refusal to abide by and comply with

the determination by Seller or Seller’s Lender.

ARTICLE VIII – CLOSING OF THIS AGREEMENT

8.1 Closing Date.

(a) The term “Closing Date” or “Closing” as used in this Agreement shall mean the date

when Seller and Purchaser have each carried out all of their obligations under this

Agreement and Escrow closes the escrow by recording in the Bureau the Unit Deed and

also any mortgage in favor of Purchaser’s Lender and making all payments required from

funds received.

(b) The actual date for Closing (the “Scheduled Closing Date”) will be a date

established by Seller in a written notice to Purchaser but, unless Seller otherwise agrees

in its sole discretion, no later than fourteen (14) days after receipt of a certificate of

occupancy for the Unit (including, if applicable, a temporary certificate of occupancy so

long as the Unit is ready for occupancy and has all necessary and customary utilities

extended to it), and regardless of whether other units under construction have been

completed.

8

8.2 Preclosing. This sale shall be preclosed not less than two (2) business days and not more

than ten (10) days prior to the Scheduled Closing Date. This means that all documents

and funds necessary for Closing will be executed and delivered to Escrow before the

Scheduled Closing Date as required for Escrow to timely submit documents to the

Bureau for recordation and to avoid any possible delays in Closing. Seller, Project Broker

or Escrow shall give Purchaser five (5) days prior written notice of the date of preclosing

(the “Date of Preclosing”). Purchaser agrees that Purchaser shall, on or before the Date

of Preclosing, make all payments required by Article III (other than Mortgage Loan

proceeds which shall be due as provided in Section 3.2) and complete all actions and

execute all documents required for Closing. This Agreement shall constitute Seller’s and

Purchaser’s written authority to Escrow to date all documents as of the Closing Date, and

adjust the estimated prorations in accordance with the provisions of this Agreement.

8.3 What Seller is Required to Do at Preclosing. On or before the Date of Preclosing,

Seller shall sign and deliver to Escrow the Unit Deed. Seller further agrees to pay all

conveyance taxes, its own notary fees and a pro-rata share of all applicable association

fees, taxes and assessments, if any (pro-rated as of the Closing Date).

8.4 What Purchaser is Required to Do at Preclosing. On or before the Date of Preclosing,

Purchaser will sign and deliver to Escrow all documents which Purchaser must sign in

order to effect the Closing. This will include, without limitation, the Unit Deed and any

mortgage in favor of Purchaser’s Lender. Purchaser will also pay to Escrow at the time

and in the manner described in Sections 3.2 and 3.3, any cash payment required on

account of the balance of the Purchase Price and all sums included in the Estimate of

Additional Sums Payable.

8.5 Estimate of Additional Sums Payable. Purchaser agrees to pay all sums included in the

Estimate of Additional Sums Payable set forth in Section 3.3 (subject to adjustment for

actual fees payable as determined at Closing), which sums are in addition to and are not

part of the Purchase Price. Purchaser’s closing costs shall include, but shall not be

limited to, all escrow fees, its own notary fees, costs of title insurance, legal costs for the

preparation of any Unit Deed or any notes and mortgages, all recording costs or fees, loan

fees, credit report costs, appraisal fees and all other applicable mortgage costs. In

addition, Purchaser agrees to pay Purchaser’s pro-rata share of all applicable

associations’ fees, taxes, assessments (including the CFD Special Tax) and other

expenses, which shall be prorated between Purchaser and Seller as of the Closing Date.

Purchaser’s share of the real property taxes and assessments (including the CFD Special

Tax) will be equal to: (a) the real property taxes and assessments (including CFD Special

Tax) payable for the Unit, if such real property taxes and assessments have already been

separately assessed for the Unit, or (b) the real property taxes and assessments (including

CFD Special Tax) payable for the entire Project, multiplied by the Unit’s common

interest percentage, if such real property taxes and assessments have not yet been

separately assessed for the Unit. Purchaser acknowledges and agrees that the

associations’ fees referenced in Section 3.3 (a) through (c) shall be in addition to any

prorated associations’ fees collected pursuant to this Section. From and after the Closing,

Purchaser is responsible for payment of all fees and assessments to the Community

Association and The Club pursuant to the Governing Documents, all fees and dues to The

9

Club Bungalows at Kukui`ula Association pursuant to the Project Documents, and all real

property taxes and all utility use costs.

8.6 Acceptance of Property. Purchaser agrees to close the sale of the Property on time and

accept possession of the Property: (a) even if other units in the Project have not yet been

fully completed and/or construction activity is still in progress, and (b) notwithstanding

the existence of any defects in or damage to the Property which does not render the

Property unusable. Purchaser promises to indemnify and hold harmless Seller from any

loss or damage, including interest and attorneys’ fees, resulting from Purchaser’s failure

to close the sale of the Property or to accept possession of the Property as required above.

8.7 Death of Purchaser. If Purchaser (or any one of the persons listed as Purchaser) dies

before the Closing Date, Seller shall have the right (but not the obligation) to require that

the personal representative of the Purchaser who died and the other Purchasers: (a)

reaffirm the representation made in Section 7.4(a), and (b) within ten (10) calendar days

from request by Seller obtain a confirmation from Purchaser’s lender that the pre-

qualification letter remains in full force and effect and/or provide updated financial data,

in each case upon and subject to the same rights of Seller to approve and, if applicable,

declare Purchaser to be in default of its representations and terminate this Agreement in

accordance with the terms and conditions of Article XV.

8.8 Delay in Closing. Purchaser acknowledges that Seller has certain recurring overhead

costs related to the overall development and its outstanding construction loan. In the

event of failure of Purchaser to actually close on the Scheduled Closing Date, and

without in any way limiting Seller’s rights and remedies under Section XV as a result of a

default by Purchaser, Purchaser agrees to pay, in addition to all other amounts due, a late

charge of one percent (1%) per month (based on the amount of the Purchase Price),

prorated on a thirty (30) day basis, to accrue commencing on the Scheduled Closing Date

and continuing until all payments required under this Agreement, together with such late

charges, are paid. Seller’s failure to exercise any right or remedy under this Agreement

shall not constitute a waiver of any of such defaults or of any of such rights, including

without limitation, the right to cancel this Agreement, and will not constitute a

modification of this Agreement.

ARTICLE IX – PRIORITY/ASSIGNMENT

9.1 Seller’s Lender Has Priority. Purchaser acknowledges that Kukui’ula Development

Company (Hawaii), LLC and Hai Fu International Investment, LLC (together,

“KDCH”), have made a purchase money loan to Seller in the amount of $4,881,310.00,

bearing interest at the rate of 0.31 % per annum, with principal and interest due on the

Maturity Date (as defined in the promissory note),, and secured by a mortgage of the

units in Phases IA and IB of the Project (the “PMM”). Purchaser also acknowledges that

Seller has entered (or may enter) into one or more loan agreements with American

Savings Bank, NA and/or other recognized and established financial institution or

institutions (collectively, “Seller’s Lender”) pursuant to which Seller’s Lender may loan

funds to Seller to cover construction costs and other associated costs of the Project and

that such funds will not exceed the principal sum of $30,000,000 for the entire Project

10

and will not exceed the principal sum of $10,575,000 for Phases IA and IB of the Project

(each, a “Loan”). The non-default interest rate will be not more than the base, prime or

similar rate established by the Seller’s Lender plus three percentage points. The term of

the Loan will not exceed sixty months. Interest only is (or will be) payable monthly with

partial payments of principal due upon the closing of the sale of each unit in the Project,

and the unpaid principal balance will be due and payable in full upon maturity. To secure

the Loan, Seller has granted (or may grant) to Seller’s Lender security interests covering

Seller’s interest in the Project, including the Unit. Purchaser acknowledges and agrees

that all security interests obtained by KDCH and Seller’s Lender in connection with the

PMM and Loan, respectively, as well as extensions, renewals and modifications of the

security interests, shall be and remain at all times, until the final closing and delivery by

Seller of the Unit Deed to Purchaser, a lien or charge on the Project, including the Unit,

prior to and superior to any and all liens or charges on the Project arising from this

Agreement or any prior agreement. PURCHASER HEREBY INTENTIONALLY

WAIVES, RELINQUISHES AND SUBORDINATES THE PRIORITY OR

SUPERIORITY OF ANY LIEN OR OTHER LEGAL OR EQUITABLE INTEREST

ARISING UNDER THIS AGREEMENT IN FAVOR OF THE LIEN OR CHARGE ON

THE PROJECT OR THE SECURITY INTERESTS OF KDCH AND SELLER’S

LENDER, INCLUDING BUT NOT LIMITED TO ANY LIEN, MORTGAGE OR

OTHER CHARGE SECURING A LOAN MADE TO FINANCE THE SELLER’S

ACQUISITION OF ITS INTEREST IN THE PROJECT OR THE COSTS OF

CONSTRUCTION AND OTHER COSTS DURING SUCH CONSTRUCTION AND

ANY AND ALL ADVANCES THEREFOR, WHETHER CONTRACTUAL OR

VOLUNTARY, UNTIL THE FINAL CLOSING AND DELIVERY BY SELLER OF A

UNIT DEED TO PURCHASER. WITHOUT LIMITATION, BECAUSE THE

DEPOSIT WILL BE USED TO PAY CERTAIN COSTS OF CONSTRUCTING

AND DEVELOPING THE PROJECT, AND A DOWN PAYMENT ON THE

PURCHASE OF THE FURNISHINGS, IF KDCH OR THE SELLER’S LENDER

FORECLOSES ITS PMM OR LOAN, RESPECTIVELY, THERE IS A RISK

THAT NEITHER KDCH NOR SELLER’S LENDER WILL ASSUME THIS

AGREEMENT AND THAT THE DEPOSIT WILL NOT BE REFUNDED TO THE

PURCHASER. Purchaser further covenants and agrees to execute any further

documentation or subordination agreement required by KDCH or Seller’s Lender to

evidence this subordination. Purchaser also consents to Seller’s assignment by way of

security of Seller’s interest in this Agreement and Purchaser’s escrow deposits to KDCH

and/or Seller’s Lender and agrees that in the event of a transfer of Seller’s interest therein

pursuant to said assignment, Purchaser will, at the option of KDCH or Seller’s Lender,

perform to, attorn to and recognize KDCH or Seller’s Lender (and its successors and

assigns) as applicable as if KDCH or Seller’s Lender were the original Seller hereunder.

Purchaser further agrees that under this Agreement, Purchaser has no rights or interests in

the Property or the Project other than a contractual right enforceable only against Seller

and not against the Property or the Project.

9.2 Assignments; Offers to Sell Prior to Closing; Seller’s Transfer of This Agreement.

(a) Assignments and Offer to Sell to Purchaser. Purchaser may not, without the prior

written consent of Seller, which consent may be withheld by Seller in its sole and

11

absolute discretion: (i) transfer this Agreement or any rights hereunder, or (ii) add,

substitute, or delete any person(s) as Purchaser under this Agreement. Further, Purchaser

expressly acknowledges and agrees that Purchaser shall have no right to sell the Unit or

offer the Unit for sale to any person or entity through any means whatsoever prior to

Closing and Purchaser’s acquisition of title to the Unit and performance of all

Purchaser’s obligations under this Agreement. For purposes of this Section, any listing

or advertising of the Unit for sale, through any means or media whatsoever (regardless of

whether the listing or advertising states that the offer or sale shall be contingent upon

consummation of Purchaser’s purchase of the Unit) shall constitute an offer that is

prohibited by this Section. Purchaser’s covenant not to sell or offer to sell the Unit prior

to Closing is part of the consideration for Seller’s agreement to sell the Unit to Purchaser

for the Purchase Price and on the terms set forth herein. Any attempt by Purchaser to do

any of the above shall be void and shall not have any legal effect. If Purchaser

undertakes such action, Purchaser will have committed a breach of this Agreement and

Seller may, at its option, exercise any or all of Seller’s remedies for Purchaser’s default

under this Agreement.

(b) Assignment by Seller. Seller may, without having to obtain Purchaser’s consent,

assign or otherwise transfer Seller’s right, title and interest in this Agreement and any

rights and obligations under this Agreement to any third party including, without

limitation, any parent, subsidiary or affiliate of Seller.

ARTICLE X - IMPORTANT DISCLOSURES RELATED

TO THE COMMUNITY, THE PROJECT, THE PROPERTY, AND THE UNIT

The information which follows below in this Article X is very important. Purchaser

is advised to carefully read each of the disclosures since they contain information

about the Community, the Project, the Property, and certain terms and conditions

related to the Unit.

10.1 Master Disclosure. The Master Disclosure Statement provides important information

about Kukui`ula and the Community in a question and answer format. It is included with

the Project Documents and Governing Documents that Seller is providing to Purchaser.

Purchaser is encouraged to review the Master Disclosure Statement carefully.

10.2 Community Association Membership.

(a) The Property and the Project are within and a part of the Community. The Property is

subject and subordinate to the terms and provisions of the Governing Documents.

Among other things, the Governing Documents provide:

(1) that every owner of a unit in the Project (an “Owner”) shall be a member of the

Community Association by virtue of such ownership;

(2) that the Community Association shall have the power and authority to have levied

against each unit and to have collected from the Owner thereof, certain fees and

assessments which are separate from and in addition to any and all assessments an Owner

12

is obligated to pay by virtue of his or her ownership of a unit in the Project, and such fees

include those listed on Exhibit C entitled “The Club Bungalows at Kukui`ula Purchaser

Agreement (Assessments and Fees)” and are subject to change in accordance with the

Governing Documents;

(3) that liens may be created on units for non-payment of assessments made on behalf

of the Community Association; and

(4) that no improvement or other work which in any way alters any unit from its

natural or improved state existing on the date such unit was first conveyed by Seller to an

Owner shall be made or done except upon strict compliance with and within the

restrictions of the Design Guidelines administered by the Design Review Committee, as

set forth in the Governing Documents.

BY ACQUIRING A UNIT IN THE PROJECT, PURCHASER COVENANTS AND

AGREES THAT PURCHASER AND THE FAMILY, LESSEES, TENANTS AND

GUESTS OF PURCHASER WILL ABIDE BY ALL APPLICABLE TERMS,

COVENANTS, CONDITIONS AND PROVISIONS SET FORTH IN THE

GOVERNING DOCUMENTS.

(b) Purchaser, by accepting title to the Property and becoming an Owner, acknowledges

and is aware that the development of the Community may extend over many years, and

agrees, so long as he or she is the Owner of the Property, not to protest or otherwise

object to: (i) zoning or changes in zoning or to uses of, or changes in density of, the

property in the Community; or (ii) changes in any conceptual or master plan, including

without limitation the development plan for property in the Community; provided, in

either case, said zoning, use, density, or conceptual, development or master plan revision

is or would be lawful (including without limitation lawful by special permit, use permit,

variance or the like) and is not inconsistent with what is permitted by the Governing

Documents (as amended or supplemented from time to time)

10.3 Plantation Membership (The Club). Purchaser automatically becomes a member of

The Club at Closing. In addition to the Plantation Membership Base Assessment which

is payable by Purchaser from the Closing Date, Purchaser will be required to pay at

Closing the Plantation Membership Initiation Fee which is a one-time fee to Purchaser, as

set forth in Exhibit C.

10.4 Golf Membership. Purchaser may be eligible to apply for and purchase a Golf

Membership pursuant to separate documentation entered into between The Club and

Purchaser. By initialing below, Purchaser acknowledges that the acquisition of a Golf

Membership is an entirely separate transaction from the purchase of the Property and is

not guaranteed by Seller, KDCH or The Club.

PURCHASER’S INITIALS_________

10.5 Estimated Associations’ Monthly Fees and Assessments. Purchaser acknowledges that

Purchaser will be obligated to pay The Club and Community Association fees, dues and

13

assessments, and The Club Bungalows at Kukui`ula Association fees, dues and

assessments, which obligations will be governed by the Governing Documents and

Project Documents, respectively, and which obligations will commence upon the Closing

Date. Purchaser has examined and approved the estimate of associations’ fees, dues and

assessments for the Property as shown in the attached Exhibit C. Purchaser is aware that

such amounts are only estimates and are subject to change for numerous and various

reasons by Seller or the Boards of Directors or managing agent(s) of the respective

associations. PURCHASER AGREES THAT SUCH ESTIMATES ARE NOT

INTENDED TO BE AND DO NOT CONSTITUTE ANY REPRESENTATION OR

WARRANTY BY SELLER INCLUDING, BUT NOT LIMITED TO, ANY

REPRESENTATION OR WARRANTY AS TO THE ACCURACY OF SUCH

ESTIMATES. Purchaser hereby specially accepts and approves any such changes made

to the maintenance fees, assessments or budgets.

10.6 Community Facilities District. Seller has advised Purchaser that, as of the Reference

Date, the Project, and specifically the Property, is included within a Community Facilities

District known as County of Kaua‘i, Hawaii Community Facilities district No. 2008-1

(Kukui‘ula Development Project) (the “CFD”). Purchaser acknowledges that the CFD

has been established. The CFD is a financing district under the jurisdiction of the County

of Kaua‘i. The County of Kaua‘i may issue Special Tax Bonds (the “Bonds”) payable

from special taxes (“Special Taxes”) levied on property within the CFD including the

Project and the Property. The proceeds of the Bonds will be used to finance the

construction and/or acquisition of significant existing and future public improvements

that generally benefit the Project and Community, some of which may be physically

located outside of the Community. The Special Tax is a lien on the land either

subordinate to or on a parity with the general real property taxes and the lien of

assessments levied in accordance with Hawaii State and County of Kaua‘i laws and the

ordinance adopting the CFD. If any portion of the Special Tax is not paid when due, the

Property may be foreclosed upon in generally the same manner and under the same

conditions and penalties and with the same effect as provided by general Hawaii State

law for sales of real property pursuant to default in payment of real property taxes. As a

condition to entering into this Agreement to purchase the Property within the Project,

Purchaser consents to inclusion of the Property within the CFD and acknowledges that

the County of Kaua‘i will levy Special Taxes on the Property. Purchaser will be

required, and hereby agrees, to execute a separate Purchaser Acknowledgment in the

form attached hereto and incorporated herein as Exhibit D for delivery to the County.

10.7 Adjacent Land Uses. Purchaser acknowledges that the information contained in this

Section 10.7 is a summary of the description of the uses that are, will, or may be made of

the lands adjacent to or in the vicinity of the Project, which uses may affect Purchaser’s

use and enjoyment of the Project. The following describes some of the uses that are, will

or may be made of the lands adjacent to or in the vicinity of the Project, based on

information currently known to Seller:

(a) West. To the immediate west of the Project is the parking area for the Kukui‘ula

Plantation House Spa, Kukui‘ula Plantation House, the Golf Clubhouse, and other

facilities of The Club and Parcel CC, a residential development.

14

(b) North. To the immediate north of the Project is the roadway that provides access to

the Project and to The Club, and additional facilities of The Club including back of house

and parking facilities and Parcel CC. Section 10.8(a) below describes a drainage

easement that is located on the northern portion of the Project.

(c) South and East. To the immediate south and east of the Project is the fairway for

hole 1 of the Golf Course, and east of the Project is an archeological/biological preserve

and hole 2 of the Golf Course and to the south of the Project are Parcel HH and Parcel II.

10.8 Easements Affecting the Property.

(a) Drainage Easement. As a part of, and at the northern end of the Project, is a major

drainage way that is at the north end of Parcel FF and serves to drain a portion of Parcel

FF as well as other areas of the Community. Easement D-7A which is part of the overall

drainage easement affects the Project and is reserved in favor of, and is a common

element of, the Community Association.

(b) Sewer Easement. A sewer easement located within the Project has been granted to

Kukui`ula South Shore Community Services, LLC.

(c) Access Easement. An eight foot wide concrete community path traverses the Project

and an access easement across that path has been granted in favor of Lot 33 of the

Kukui`ula Residential Subdivision Phase III-A (the “Benefited Property”). The

easement may be used by the owner or occupant and any licensee or guest of an owner or

occupant of the Benefited Property, and the owner of the Benefited Property has the right

to grade, pave, construct, maintain, operate and repair the easement area.

(d) Utility Easement. An easement for utility purposes affecting the Project has been

granted to Kauai Island Utility Cooperative.

10.9 Golf Course. Purchaser acknowledges that being near or overlooking the Golf Course

may result in various risks, nuisances, hazards, conditions and annoyances to persons and

property on Parcel FF as a result of golf course-related operations and activities, which

include, but are not limited to: (i) Golf Course construction and maintenance (lawn

mowers and watering facilities), pest management (use of pesticides), and weed and

fungus control (use of herbicides and pesticides); (ii) irrigation of the Golf Course,

surrounding lands and “common areas” as defined in the Charter with irrigation water,

treated effluent, or other sources of non-potable water (which water is not for human

consumption); (iii) errant golf balls or golf clubs or parts thereof (which may cause

personal injury and property damage); (iv) the existence of events (including

tournaments) at the Golf Course, and other land uses in the vicinity, which may create

noise, bright lights, traffic congestion, loss of privacy and other inconveniences; (v)

noise, loss of privacy, and entry onto the common elements of the Project by golfers,

which may affect use and enjoyment of Parcel FF; and (vi) other conditions and risks

common to golf courses and golf communities (collectively, the “Golf Course Risks”).

15

10.10 Assumption of Golf Course Risks. Purchaser hereby assumes the Golf Course Risks

and accepts and approves these conditions and any inconvenience or annoyance that

Purchaser may experience as a result of such conditions and hereby expressly waives any

rights, claims or actions that Purchaser might otherwise have against Seller, KDCH, the

Community Association, The Club, The Club Operator (as defined in the Governing

Documents) and their respective agents, principals, members, employees, affiliates or

guests, as a result of such circumstances, including, without limitation, any right to seek

damages or make any claim for injury to persons or property attributable thereto, and any

right to require that such conditions be corrected or eliminated.

10.11 Indemnity by Purchaser. By initialing below, Purchaser hereby releases and agrees to

indemnify and hold harmless Seller, KDCH, the Community Association, The Club and

The Club Operator from any losses, liability, claims or expenses, including attorneys’

fees, arising from or relating to property damage or personal injury resulting to Purchaser

or to anyone claiming by, through or under Purchaser from any of the Golf Course Risks.

This release and indemnification shall survive the Closing.

PURCHASER’S INITIALS ___________

10.12 Transient Vacation Rentals.

(a) Zoning. Purchaser acknowledges that (a) Parcel FF is designated as Urban by the

State of Hawaii Land Use Commission, and (b) is zoned R-10 and RR-10 (Residential

and Resort Residential) under the zoning regulations for the County. Nevertheless, in

accordance with the zoning ordinance PM-2004-370, the permitted density is limited to

four residential units per acre. Under its current zoning, Parcel FF may be used only for

residential and accessory purposes.

(b) VDA/TVR/LODGE RENTAL PROGRAM. The foregoing notwithstanding, the

Community is zoned as one large Visitor Destination Area (“VDA”) and up to 750 units

in the entire Community may be designated as Transient Vacation Rentals (“TVR” or

“TVRs”), which allows transient rental of a home or Club Bungalows. The final

subdivision map approved by the County of Kauai for the subdivision of Parcel FF

provides that all units within the Project are designated for TVR use (all units in the

Project are designated as “Club Bungalows”). Under the TVR zoning designation,

residential dwellings in the Community may be used for short-term rental purposes,

pursuant to the terms and restrictions set forth in the Governing Documents. Units in the

Project are subject to the various TVR-related restrictions in the Charter and any

supplement thereto. Except for units in the Lodge Rental Program, or as otherwise

designated by the Master Developer, no TVR may be rented for less than the seven-day

minimum. Participation in the Lodge Rental Program will require that the Unit has a

standard furnishings package. Purchaser acknowledges that tenants of leased Club

Bungalows or renters of TVRs within the Community shall have no rights to use The

Club’s facilities (including the Golf Course) unless they otherwise qualify under Section

3.5 of the Covenant addressing the Lodge Rental Program, as such Section of the

Covenant may be amended.

16

(c) Zoning and Land Uses Subject to Change. Purchaser further acknowledges that

County approvals, and existing and/or proposed uses of the property located adjacent to

or in the vicinity of Parcel FF are subject to change and are not within Seller’s control.

All zoning is subject to change in the future and Seller makes no representations,

promises, or warranties regarding how the property adjacent to or in the vicinity of the

Project will be used or developed. Owners of lands adjacent to or in the vicinity of Parcel

FF may seek to rezone their property, may seek zoning variances for their property,

and/or may modify their site plan within existing zoning.

10.13 The Community. Purchaser acknowledges that KDCH, as developer of the Community,

has made no warranties or representations whatsoever that the plans presently envisioned

for the development of the Community can or will be carried out, or that any land within

the Community now owned or hereafter acquired by KDCH is or will be committed to or

developed for a particular (or any) use, or if that land is once used for a particular use,

that such use will continue in effect.

(a) Purchaser acknowledges that KDCH reserves the right to develop any other portion of

the Community separately from Parcel FF, and to subject such other portion of the

Community to such other general plan of subdivision, development, improvement and

sale, and such other covenants, conditions and restrictions as KDCH may deem

appropriate.

(b) Purchaser acknowledges that the views from Parcel FF and the Property, if any, are

not guaranteed and are likely to be affected by future development and that the grade of

the land within Parcel FF may be altered from its current level and some additional

changes may occur from the roadway construction. By entering into this Agreement for

the purchase of the Property, Purchaser shall be deemed to have received the aforesaid

disclosure regarding future views.

10.14 Ongoing Construction and Sales Activities.

(a) Ongoing Construction. The Property is adjacent to or near other properties that

have been or may be developed after Purchaser has accepted possession of the Property.

Until development or construction of particular phases of the Project is commenced,

portions of the Property including parking areas may be utilized for (a) storing of

construction materials or equipment; or (b) a staging area in connection with the

construction. The roadways in and around the Property will be used by construction

vehicles and equipment for ingress and egress to the construction sites. Purchaser

understands and acknowledges that the development, construction and/or sales of the

Project or such other properties may result in noise, dust, increased traffic and other

nuisances or annoyances to persons within the Project, and may limit Purchaser’s access

to portions of the Project. Care must be taken around construction sites, as certain

hazardous conditions relating to the construction may exist for a period of time. In

addition, continued development of additional phases of the Project and areas around the

Project may cause dust in and around the Property for a number of years. Purchaser

acknowledges and understands that Seller will make efforts to minimize dust, but that it

is an inevitable result of the ongoing construction. PURCHASER ACKNOWLEDGES

17

AND HEREBY WAIVES ANY RIGHTS, CLAIMS OR ACTIONS WHICH

PURCHASER MAY NOW HAVE OR WHICH MAY ACCRUE IN THE FUTURE

AGAINST SELLER AS A RESULT OF ANY DAMAGE TO PURCHASER’S

PROPERTY, INCLUDING ANY PERSONAL PROPERTY, ANY

INCONVENIENCE, ANNOYANCE, OR NUISANCE CAUSED BY ANY SUCH

ONGOING CONSTRUCTION ACTIVITIES. THE TERMS OF THIS WAIVER

SHALL SURVIVE THE OCCUPANCY BY THE PURCHASER OF THE

PROPERTY AND THE DELIVERY OF THE UNIT DEED FOR THE

PROPERTY.

(b) Ongoing Sales Activities. Purchaser understands and acknowledges that sales

activities for the Project or such other properties, including the use of model homes, sales

offices, Project parking stalls, signs, banners, flags, and extensive displays and activities

will continue on, near or adjacent to the Project until such time as the sales for such

properties have been completed. Such sales activities may result in increased vehicular

and pedestrian traffic in the area, increased noise, and less privacy.

10.15 Environmental and Utility Effects. The Project is in the vicinity of various electric,

water and other utilities, public roads and thoroughfares, commercial uses, undeveloped

lands and lands used for agricultural or livestock operations, which may result in noise,

smoke, soot, dust, light, heat, noxious vapors, odors, surface runoff, chemicals,

particulates, vibrations and other nuisances, annoyances, disturbances or hazards to

persons and property on or within the Project.

10.16 Security. Purchaser understands and acknowledges that neither Seller, its members,

Seller’s parent companies, subsidiaries, and affiliates, the Community Association, nor

The Club Bungalows at Kukui`ula Association shall be considered in any way an insurer

or guarantor of security within the Project. Purchaser acknowledges and agrees that

neither Seller nor its members, Seller’s parent companies, subsidiaries, nor affiliates

(including but not limited to Project Broker) has made any representation or warranties,

either express or implied, about any security measures at the Project.

10.17 Assumption of Risk; Release and Indemnification. As to each of Sections 10.12

through 10.16 hereinabove, Purchaser covenants and agrees to assume all risks of

impairment of the use and enjoyment of the Property, loss of market value of the

Property, loss of property, property damage, personal injury, or death arising from or in

connection with any of the above, and Purchaser hereby releases Seller, Seller’s members

and their respective parent companies, subsidiaries, and affiliates (including but not

limited to Project Broker), their respective directors, officers, members, employees,

agents, successors and assigns from and against any and all liability, claims, losses,

damages, or expenses arising from or in connection with any of the above. Purchaser

further covenants and agrees to indemnify and hold harmless Seller, Seller’s members

and their respective parent companies, subsidiaries, and affiliates (including but not

limited to Project Broker), their respective directors, officers, members, employees,

agents successors and assigns from and against any and all liability, claims, losses,

damages, or expenses arising from or in connection with the abovementioned Sections

10.12 through 10.16. This release and indemnification shall survive Closing.

18

10.18 Model Units; Advertising Materials.

(a) Model Units. Any model units or homes and various advertising materials,

brochures, website depictions, and displays are intended solely to assist Purchaser in

visualizing the floor plan of the Unit that Purchaser is purchasing, but are not intended to

be exact replicas or depictions of all the units or buildings in the Project. The model units

or homes may also contain numerous upgrades, options, custom paint colors, and

decorator items (including but not limited to, upgraded flooring, optional floor plans,

appliances, furnishings, fixtures, landscaping, walkways, gutters and drainage facilities)

which are not included with the Property being purchased by Purchaser, or which if

included with the Property being purchased, may differ from that shown with the model

units or homes or in the advertising materials, brochures or displays due to differences in

site conditions (such as the slope or grade of the site) or various other factors or

constraints.

(b) Advertising Materials. Illustrations provided are artists’ conceptual depictions only

of proposed improvements, are not necessarily to scale, and may differ from actual

improvements, if any, when constructed. Some of the photographs do not depict actual

scenes, locations, or activities at or near the Property.

10.19 Area Schools. The determination of a school’s district boundaries and what school the

children of residents at the Project will be able to attend are determined by the State of

Hawaii, Department of Education (“DOE”) in its sole discretion. Seller or its affiliates

have no input, influence, or control over how the school district boundaries are or will be

established. Please contact the DOE if you have any questions on what school(s) your

children will attend.

10.20 Subsurface Conditions. The subsurface conditions of the Property may vary depending

on underground conditions including, without limitation, the prior use of the Property, the

surface and subsurface soil types and existing geological conditions. In addition,

Purchaser acknowledges that fill has been brought, spread, and compacted upon the

Property.

10.21 Terms of Sale and Other Units. Purchaser acknowledges that other units in the Project

(including units similar or comparable to Purchaser’s Unit) may be sold by Seller to other

purchasers upon terms and conditions different from or more favorable than the terms

and conditions offered to Purchaser. Without limitation, Seller may increase or decrease

the offered purchase price for a unit at any time in Seller’s sole discretion without prior

notice or obligation notwithstanding any prior price listing in brochures, Seller’s website,

the multiple listing service or similar listing services, advertising materials, or other

printed or published information. The pricing of a unit is subject to a number of factors

including, but not limited to, changes in the construction cost, the interest rates charged

by Seller’s Lender under the construction credit facility, the time period the property is

offered for sale, the level of available supply of inventory in relation to current demand,

current market conditions, and other tangible and intangible factors. Because of these

factors, the price of a particular unit may be different from the price of another unit even

19

though the model type located thereon may be identical. Seller makes no representation

or warranty that the sale prices for any unit in the Project will be equal to or higher than

the Purchase Price for the Unit, even if the type of Unit is identical.

10.22 Mailbox/Trash Centers. Purchaser acknowledges and agrees that the US Postal

Service’s current policy is to not provide mail delivery directly to individual units within

the Project. Instead, the US Postal Service will deliver mail to a “mailbox center”, which

will be located within the Project. The “mailbox center” structure will contain separate

locked mailboxes for each unit. Purchaser further acknowledges and agrees that the

mailbox assigned to a particular unit may not be centrally located to such unit and may

require the occupant or owner of such unit to traverse some distance in order to pick up

mail. Similarly, trash enclosures will be included in the Project but may not be centrally

located to each unit and may require the occupant or owner of a unit to traverse some

distance in order to dispose of trash.

10.23 Metal Work Disclosure. Metal work finish is severely impacted by salt air conditions.

Notwithstanding anything in this Agreement to the contrary, no warranty is given for

such finishes and Seller makes no representations regarding rust prevention maintenance

requirements. Aggressive action to prevent rust is required by Purchaser. All metal work

may corrode, have pock marks, peel, rust or, in the case of painted metal materials,

bubble and peel. Vinyl coated metal work may peel due to salt air conditions, which will

require replacement more frequently than normally expected.

10.24 Mold Disclosure. Mold is a type of fungus that occurs naturally in the environment and

is spread by means of microscopic spores in the air. Residential home construction is

not, and cannot be, designed to exclude mold spores from a home. Mold spores may

enter a home through open doorways, windows, and air conditioning systems. Spores in

the air also attach themselves to people and animals, making clothes, shoes, and pets

convenient vehicles for carrying mold spores indoors. Mold spores require a food source

and moisture source. The food source may be supplied by decorative items found in the

home, such as fabric, carpet, wallpaper, or even building materials. Moisture sources

include spills, leaks, overflows, condensation, excessive landscape watering and high

humidity. Although the vast majority of molds are not known to cause health problems,

some molds have the potential to cause health effects to individuals whose susceptibility

is affected by existing sensitivities to allergies, underlying lung disease, and suppressed

immune systems. There are currently no federal, state, or local standards that establish

permissible limits for exposure to mold. Since microscopic mold spores exist everywhere

naturally in the environment, mold cannot be prevented or removed entirely. The only

way to prevent mold growth is to eliminate excessive moisture in the home. Unit owners

must therefore take positive steps to eliminate excessive moisture in the home through:

(a) regular vacuuming and cleaning; (b) reducing humidity in the unit by adequately

venting the unit; (c) promptly repairing water leaks; (d) regularly maintaining the unit;

and (e) performing routine visual inspections for mold growth and signs of leaks,

moisture or water damage. Seller will not be responsible for any damages caused by

mold. Additional resources for information on mold include the Centers for Disease

Control and prevention website and the Environmental Protection Agency website for

indoor air quality. The current links to these websites are as follows:

20

http://www.cdc.gov/mold/dampness_facts.htm

www.epa.gov/iag/molds/moldresources.html.

10.25 Natural Wood Disclaimer. Natural wood products may be used in the manufacturing of

the cabinets, entry doors, stair rails, windows, floors and exteriors. Wood, by its nature,

is not uniform in regards to the color or grain and may have significant color variations.

Every piece of wood will accept stain differently depending on its color, porosity, and

graining. Therefore, Seller makes no representation that the wood used in or on the

Property will look the same as the model units or any samples, or that the coloring will

not vary. Such wood surfaces and finishes may crack at joints and are subject to

expansion and contraction depending on exposure to the sunlight, moisture, and

humidity. The frequency and extent of the maintenance required of Purchaser is

dependent upon exposure to direct sunlight, moisture, humidity, smog or particulates in

the air, including but not limited to salt. Purchaser further acknowledges that wood

products are subject to color variations as they age or depending on exposure to sunlight.

10.26 Wood Flooring Disclosure. Wood flooring, like other natural wood products, is subject

to color variations, texture differences, silvering, and inconsistent grain patterns. Seller is

not making any representations or warranties that the wood flooring installed will have a

uniform coloring or graining and Purchaser assumes all risk associated therewith. Wood

flooring will not be seamless and may creak when walked upon. Wood flooring is

susceptible to damage from water or other moisture. Purchaser is advised that wood

flooring installed in high moisture areas such as a kitchen, bathroom, or near outdoor

areas are subject to a higher risk of damage. In addition, wet mopping wood flooring

may also cause damage to the flooring materials. Purchaser acknowledges and agrees

that Seller does not warrant against water or moisture damage to wood flooring.

10.27 Security System Disclaimer. Security systems or materials are provided to Purchaser by

Seller in conjunction with the purchase of the Property solely as a convenience to

Purchaser. Seller makes no representations as to quality, serviceability, merchantability,

or level of security provided.

10.28 Natural Stone Variation. Natural stone may be utilized in the finishes of a floor,

shower, countertops, or other areas within a unit. Natural stone, by its nature, is not

uniform in regards to the color, pattern, tonal quality, texture or veining and may have

significant variations. When utilized for countertops, the color, patterns, tonal quality,

texture or veining of natural stone may not be matched up consistently. Therefore, Seller

makes no representation or warranty that (a) the natural stone used in or on the Unit will

be the same color, patterns, tonal quality, texture, or veining throughout the Unit or as

may be displayed in the model units or any samples, or (b) that the coloring, patterns,

tonal quality, texture or veining will not vary.

10.29 Insulation. The Federal Trade Commission requires disclosures regarding house

insulation. Insulation installed in the Unit is: (a) R-19 fiberglass batts at the underside of

the roof sheathing, and (b) R-19 fiberglass batts at the exterior walls. Other than herein

described, there is no other house insulation planned for installation in any unit within the

21

Project, and no representations are or may be made that owners of units in the Project

will save on household expenses as a result of any house insulation.

10.30 Wastewater Facility. A wastewater collection and treatment facility located within the

general vicinity of the Project may be constructed in the future. (An existing facility in

the vicinity of the Project is no longer in operation.) Potential impacts of a wastewater

facility include noise, vibrations, and unpleasant odors. Seller makes no representation or

assurances or warranties if or when a new wastewater facility will be constructed.

10.31 Flood Zone. According to the Flood Insurance Rate Map (“FIRM”) prepared by the

Federal Emergency Management Agency (“FEMA”), all of Parcel FF currently falls

within Zone “X,” which FEMA defines to include “areas outside the 1-percent annual

chance floodplain, areas of 1% annual chance sheet flow flooding where average depths

are less than 1 foot, areas of 1% annual chance stream flooding where the contributing

drainage area is less than 1 square mile, or areas protected from the 1% annual chance

flood by levees.” According to FEMA, Zone “X” is considered a low to moderate flood

risk area. However, changes in natural drainage due to development within Parcel FF

and the Community may affect the risk of flooding from storm water runoff. To Seller’s

knowledge, flood insurance is not currently required by FEMA for a Zone “X”

designation, which means that FEMA would not currently require flood insurance for the

Project or Property. However, Purchaser may be required by public or private lending

institutions or other parties to obtain and maintain flood insurance policies and is advised

to check with its lenders to determine their flood insurance requirements. Purchaser is

also advised to check with various insurance carriers to determine the cost of any such

flood insurance.

ARTICLE XI - PROJECT DOCUMENTS AND

SELLER’S RESERVED RIGHTS AND POWERS

11.1 Review of Project Documents, Governing Documents and Master Disclosure

Statement. Purchaser acknowledges that the Project Documents, Governing Documents

and Master Disclosure Statement are available in the Project Broker’s sales office for

Purchaser’s review and inspection and agrees to execute a receipt for any copies thereof

requested by Purchaser and/or provided by Seller.

11.2 Seller’s Right to Amend Documents. Purchaser understands and acknowledges that, in

addition to the rights reserved by Seller in the Project Documents including those rights

referenced in Sections 6.1(a) and 11.5, Seller reserves the right to make the following

changes, amendments or modifications to the Project Documents and to all other

contracts, documents or instruments related to the Project without the approval, consent

or joinder of Purchaser:

(a) Changes required by law, the Commission, any title insurance company, any

institutional lender, or any governmental agency; or

22

(b) Changes deemed necessary or appropriate by Seller, in its sole discretion, at any time

prior to the conveyance of the first unit in the Project or any interest therein to any person

other than Seller or any mortgagee of Seller; or

(c) Technical or non-substantive changes deemed appropriate by the Project’s architect,

in its sole discretion, including any increase or decrease in the thickness of any wall

within any building in the Project resulting in the room dimensions thus affected

becoming smaller or larger; or

(d) Minor changes in the Unit covered hereby, or changes in the configuration, the

number of rooms, the size, or the location of any other unit (including, without limitation,

the relocation of walkways, stairs, roads and parking areas), provided that such changes

do not affect the physical location or design of the Unit covered hereby without the

consent of Purchaser; or

(e) Deviations from the plans and specifications for the Project and substitution of

materials of equal utility, quality and service; or

(f) Any other changes which are permitted or desirable as provided in the Project

Documents.

11.3 Power of Attorney. Purchaser hereby irrevocably appoints Seller as Purchaser’s

attorney-in-fact, coupled with an interest, to execute any documents reasonably necessary

or convenient to implement the provisions of Section 11.2 hereof.

11.4 Withdrawal of Land. Purchaser understands and acknowledges that Seller, KDCH

and/or their respective parent companies, subsidiaries, and affiliates reserve the right to

withdraw portions of the Project from being subject to the Declaration and/or the Charter,

as set forth in the Declaration and the Charter.

11.5 Authority of Seller. Purchaser understands and acknowledges that pursuant to the

Declaration, the Seller reserves the right to exercise control of the Association including

the sole right to appoint its Board of Directors and officers for the “Developer’s Control

Period” as defined in the Declaration. Purchaser further understands and acknowledges

that, even after the Developer’s Control Period, Seller, as the owner of certain unsold

units in the Project, may exercise all rights and incidents of membership in the

Association attributable to such units. Further, Seller as the owner of the Property may,

until the Closing, exercise all rights and incidents of membership in the Association

attributable to the Property.

11.6 Management Agent and Other Contracts. Purchaser agrees that Seller may select and

employ a manager or management company to manage the affairs of the Association and

enter into a management contract on behalf of said Association and that, although

employed prior to the election of said Association’s Board of Directors, the manager or

management company shall have complete authority, subject to the provisions of the

Declaration, to assume full control and responsibility for the management, operation and

maintenance of the Project as provided in the Declaration.

23

11.7 Project Documents Reserved Rights. Purchaser understands and acknowledges that the

Project Documents contain a number of other significant and broad reservations of rights

and powers held by Seller, including rights with respect to phasing and modifying the

Project. Without limitation, Section R of the Declaration specifies many of the reserved

rights of Seller. The current intent of Seller is to exercise those rights to amend the

Declaration and Condominium Map from time to time to create and construct additional

units as well as additional parking areas, mailboxes, and the like. However, whether any

further units or improvements are constructed and the type of units and other

improvements constructed will depend upon various factors including, without limitation,

market demand. The Seller may also elect to reduce the size of the Project by deleting

any of the units that have not been sold and/or to remove part of Parcel FF from the

Project. The common interest appurtenant to the Purchaser’s Property, and therefore the

Purchaser’s share of common expenses, will be adjusted upon each addition or deletion

of units so that the common interest for each unit shall be calculated by dividing the

unit’s Net Living Area by the Net Living Area of all units in the Project; provided that

the Seller shall have the right, it its sole discretion, to round the results of such

calculations so that the sum of the common interests equals exactly one hundred percent

(100%). Additionally, the owners of a unit do not become liable for a share of the

common expenses until a certificate of occupancy is issued for the unit; therefore,

notwithstanding the common interest appurtenant to all of the units, until such time as all

units have been constructed and have received a certificate of occupancy, the share of

common expenses shall be allocated among the units for which certificates of occupancy

have been issued, based on the relative Net Living Areas of such units.

Purchaser is strongly urged to review the Project Documents for a complete discussion of

the Seller’s reserved rights. PURCHASER HEREBY SPECIFICALLY CONSENTS

AND AGREES TO ALL SUCH RESERVATIONS AND POWERS SET FORTH

IN ANY AND ALL OF THE PROJECT DOCUMENTS.

PURCHASER’S INITIAL(S) __________

ARTICLE XII - GOVERNING DOCUMENTS AND

KDCH’S RESERVED RIGHTS AND POWERS

THIS ARTICLE IS NOT INTENDED TO PROVIDE A COMPLETE LISTING OF ALL

RESERVED RIGHTS AND POWERS OF KDCH. PURCHASER IS STRONGLY

ENCOURAGED TO REVIEW ALL OF THE GOVERNING DOCUMENTS FOR A

COMPLETE DISCUSSION OF SUCH RESERVED RIGHTS AND POWERS.

12.1 Possible Annexation or Merger. Purchaser understands and acknowledges that KDCH

and/or its parent companies, subsidiaries, and affiliates reserve the right to annex

additional lands for future phases of the Community as set forth in the Charter.

12.2 Management Agent and Other Contracts. Purchaser further agrees that KDCH may,

as the developer of the Community, select and employ a manager or management

company to manage the affairs of the Community Association and enter into a

24

management contract on behalf of the Community Association and that, although

employed prior to the election of said Association’s Board of Governors, the manager or

management company shall have complete authority, subject to the provisions of the

Charter, to assume full control and responsibility for the management, operation and

maintenance of the Community as provided in the Charter.

12.3 Governing Documents Reserved Rights. Purchaser understands and acknowledges that

the Governing Documents contain other reservations of rights and powers held by KDCH

such as, but not limited to, amending and/or adding to the Governing Documents subject

only to the limitations contained therein. Purchaser hereby specifically consents and

agrees to all such reservations and powers set forth in any and all of the Governing

Documents.

PURCHASER’S INITIAL(S) __________

ARTICLE XIII – TITLE

13.1 Title Information. The information appearing in Article II hereof will be used in

preparing the Unit Deed, closing statement and other necessary documents. Purchaser

shall inform Escrow and Seller immediately if any such information is changed. If, as a

result of Purchaser’s failure to provide correct information, the Unit Deed, closing

statement or any other necessary document is prepared incorrectly and must be redrafted,

Purchaser agrees to pay all fees and costs involved in such redrafting.

13.2 Title Insurance. Purchaser acknowledges and agrees that, notwithstanding any

provision contained in this Agreement or in the Escrow Agreement, Seller has not

directly or indirectly required Purchaser, as a condition of sale, to purchase either an

owner's or mortgagee's title insurance policy from any particular title insurance company.

Purchaser is free to purchase at its own expense title insurance from any authorized title

insurance company. Purchaser further acknowledges that if either an owner's or

mortgagee's title insurance policy is purchased from a title insurance company other than

Title Guaranty of Hawaii Incorporated, the Escrow Agreement shall nevertheless remain

with Escrow and the escrow fee shall be assessed pursuant to Escrow's regular schedule

of fees.

ARTICLE XIV – SELLER’S REPRESENTATIONS

14.1 Completion of the Property. Seller shall construct and complete the Unit and have such

improvements ready so as to permit normal occupancy with all necessary and customary

utilities, within a period of twenty-four (24) months from the date that this Agreement is

executed by Purchaser; provided, however, that said 24-month period shall be extended

for any period during which completion has been delayed by matters and/or conditions

which would be legally supportable in the State of Hawaii as an impossibility of

performance for reasons beyond the control of the Seller. If there is a breach of this

covenant, Purchaser shall have all rights at law and in equity, including the right to sue

for specific performance, damages, and/or any and all other equitable or legal relief, and

nothing in this Agreement or any other document shall be interpreted to in any way limit

25

this right. The terms of this Section 14.1 shall control in the event of any conflict or

discrepancy with any other terms or provisions of this Agreement or any other Project

Documents including any other term or provision that could be interpreted or construed

to in any way limit or affect the obligation of Seller under this Section, the intent being

that the Seller’s obligation to build as set forth in this Section controls and no other term

or provision is intended to limit such obligation. Purchaser acknowledges that Seller

intends to utilize the statutory exemption from the registration requirements of the

Interstate Land Sales Practices Act set forth at 15 U.S.C. 1702 and commonly known as

the “completed lot” exemption. Purchaser agrees that the use of the exemption will result

in costs savings enabling Seller to pass the savings on to the Purchaser and in more

certainty as to the timing for commencement and completion of construction and delivery

of the Property to Purchaser.

14.2 No Offer of Rental or Similar Program by Seller. SELLER IS NOT OFFERING

ANY RENTAL OR SIMILAR PROGRAM WITH ANY PURCHASE OF A UNIT

IN THE PROJECT. THE NON-INVESTMENT ADDENDUM ATTACHED

HERETO AS EXHIBIT F CONTAINS A SPECIFIC AGREEMENT BY THE

PURCHASER THAT THE PURCHASER REPRESENTS AND WARRANTS

THAT NO ONE HAS MADE ANY REPRESENTATION TO THE PURCHASER

ABOUT THE INVESTMENT POTENTIAL OF A UNIT OR THE

PERFORMANCE OF ANY RENTAL PROGRAM. SELLER DISCLAIMS ANY

INVOLVEMENT WITH, OR ENDORSEMENT OF, INFORMATION THAT

MIGHT HAVE BEEN PROVIDED TO THE PURCHASER CONCERNING THE

POTENTIAL INCOME FROM THE RENTAL OF THE UNIT.

PURCHASER’S INITIALS:

ARTICLE XV – DEFAULT

15.1 Default by Purchaser. If Purchaser fails to make any payment when it is due or fails to

keep any of the other promises or agreements of Purchaser set forth in this Agreement or

if Purchaser has misrepresented its ability to pay the Purchase Price or close this

Agreement, Seller will give Purchaser written notice of such default or breach and of the

opportunity to remedy such default or beach within twenty (20) days after the receipt of

such notice. If Purchaser does not cure such default or breach within twenty (20)

calendar days after Purchaser’s receipt of such notice, Seller shall have the following

rights:

(a) Seller may cancel this Agreement by giving Purchaser written notice of cancellation.

Seller may then retain Purchaser’s Deposit as “liquidated damages” (i.e., the amount

agreed to by Purchaser and Seller as properly payable in settlement for breach of

contract), in lieu of actual damages and not as a penalty. Purchaser agrees to this

liquidated damages provision because it would be difficult to calculate the amount of loss

or damage that Seller would suffer in the event of Purchaser’s default because of a

number of factors, including the nature of the real estate market in Hawaii, the

availability of construction financing, the difficulties in apportioning to the Property a

26

fair share of Seller’s costs relating to the development of the Project, and the difficulty in

determining damages resulting from Purchaser’s default.

(b) Seller may file a lawsuit for “specific performance,” which means a lawsuit to require

Purchaser to pay the Purchase Price and keep all of the Purchaser’s promises under this

Agreement.

15.2 Default by Seller. If Seller fails to keep any of Seller’s promises or agreements

contained in this Agreement, Purchaser will give Seller written notice of such failure.

Except for the covenant to complete construction within 24 months as set forth in Section

14.1 for which there is no cure period, Seller shall have the right to cure such default or

failure within twenty (20) calendar days after Purchaser sends notice of such default. If

Seller fails to complete construction within the 24 month period as set forth in Section

14.1 or if Seller fails to cure any other default within the 20-day cure period, Purchaser

may cancel this Agreement by delivering to Seller and Escrow written notice of such

cancellation, and may also take advantage of any other rights which the law allows,

including, for example, a lawsuit for actual damages suffered, and/or a lawsuit for

“specific performance”. Without limitation, upon such cancellation, Purchaser shall be

entitled to receive a refund of all sums paid hereunder by Purchaser.

15.3 Dispute Resolution.

(a) Purpose. The purpose of this alternative dispute resolution provision is to

provide the Purchaser, Seller and others with a mechanism to resolve Disputes in an

expeditious and cost-effective manner. As used herein, “Dispute” means any and all

claims, actions, disputes or disagreements (whether based on contract, tort, or statute) that

arise out of or relate to: the Project; the Project Documents, including any disagreements

with respect to the rights reserved under the Declaration, this Agreement or any other

Project Documents by Seller or Fee Owner (as defined in the Declaration) or the

interpretation or exercise thereof; the development, construction, sales, marketing,

financing and delivery of the Property or the Project; the design or construction of any

improvements comprising a part of the Project or Property, including any claimed

construction or design defects; any condition affecting the Project or Property including

soils or grading conditions; any alleged breach of contract or warranty; and the

determination of the scope or the applicability of this section and the agreements to

mediate and arbitrate as provided herein.

(b) Good Faith Negotiation. If a Dispute arises between the Purchaser and the

Seller or Fee Owner or their respective members, officers, directors, employees and

affiliates in their capacities as such as opposed to their capacities, if applicable, as an

Owner, member of the Board of Directors or managing agent of the Project (the

alternative dispute resolution procedures for disputes between or among one or more

Owners, Board members, the Association and the managing agent being as provided in

Chapter 514B of the Hawaii Revised Statutes) or any contractor, subcontractor,

materialman, design professional, engineer or others who provided labor, materials, or

services in connection with any construction or design work on the Project, the

Purchaser and such other party to the Dispute (each, a “Party”) shall promptly meet and

27

confer in good faith to resolve any such Dispute without any third-party intervention.

(c) ADR Procedures Exclusive. If any Dispute with the Seller cannot be resolved

by negotiation, the Purchaser and Seller agree that the alternative dispute resolution

procedures in this Section (the “ADR Procedures”) shall be the exclusive method for

resolving such Dispute. Likewise, the ADR Procedures shall be the exclusive method for

resolving any Dispute with any other Party that advises the Purchaser in writing that the

Party agrees to be bound by the ADR Procedures, provided that, with respect to a Dispute

for which compliance with the Contractor Repair Act, HRS Chapter 672E, as amended

from time to time (“Chapter 672E”), is required, the provisions of that chapter shall

apply to such Dispute. If a Dispute subject to Chapter 672E is not resolved through the

use of the mandated procedures in that chapter, then the arbitration provisions in the

ADR Procedures shall be the exclusive method for resolving any Dispute with any such

Party that advises the Purchaser in writing within thirty (30) days after the conclusion of

the mediation under that chapter that the Party agrees to be bound by the arbitration

provisions of the ADR Procedures.

(d) ADR Procedures. The ADR Procedures are as follows:

(i) Mediation. The Dispute shall be submitted to mediation administered by

Dispute Prevention and Resolution, Inc. (“DPR”) or, if such entity is no longer in

existence, then to mediation administered by a mediator appointed by the mutual

agreement of the parties or, if the parties are unable to agree on a mediator, then by

mediation administered by the American Arbitration Association. Such mediation shall

take place in the City and County of Honolulu, State of Hawaii (or such other location as

the parties shall mutually agree) in accordance with the rules, procedures, and protocols

for mediation of disputes adopted by the chosen organization. The mediation shall be

concluded if a voluntary resolution of the Dispute is not achieved within thirty (30) days

from the date the matter was submitted to mediation or earlier if the mediator determines

that an impasse exists.

(ii) Arbitration. If the mediation of the Dispute is concluded without a

resolution (or with respect to a Dispute subject to Chapter 672E, if the mediation

pursuant to that chapter is concluded without a resolution and the Party has notified the

Purchaser in writing within thirty (30) days after the conclusion of such mediation that

the Party agrees to be bound by the provisions of this Section), the parties shall resolve

such Dispute through binding arbitration, conducted in the City and County of Honolulu,

State of Hawaii, administered by the organization that administered the mediation

(whether pursuant to provisions of this Section or Chapter 672E) or such other

organization to which the parties agree. Except to the extent inconsistent with the

procedures and terms set forth below, which shall control, the arbitration shall be

conducted in accordance with HRS Chapter 658A, as amended from time to time, and the

respective and applicable rules, procedures and protocols of the chosen organization; if

the Dispute involves the interpretation of this Agreement or Project Documents including

without limitation any disagreements with respect to the rights reserved by the Seller or

Fee Owner or the interpretation or exercise thereof, the rules, procedures and protocols

for an expedited procedure shall be utilized if the chosen organization has such rules.

28

The parties shall agree upon a single arbitrator who is knowledgeable in the

subject matter at issue and who shall be selected in accordance with the applicable rules,

procedures and protocols of the chosen organization. The single arbitrator shall

determine any controversy concerning whether a particular issue is arbitrable, and shall

try all issues, whether of fact or law, and award all declaratory relief (even if the issue is

not ripe) and all legal and equitable relief appropriate under the circumstances of the

Dispute. If the parties are unable to agree on an arbitrator within ten (10) days of a

written request to do so by a party, either party may seek to have one appointed by a

court of competent jurisdiction. The cost of such proceeding shall initially be borne

equally by the parties, but shall ultimately be borne by the party who does not prevail in

the arbitration. The arbitrator shall not be entitled to award consequential damages or

other exemplary relief (provided that the foregoing is not intended to limit the arbitrator’s

ability to award statutory remedies or to award punitive damages), or any damages

excluded by, or in excess of, any damage limitations expressed in this Agreement or any

agreement between the parties. The arbitrator shall award reasonable attorneys’ fees and

costs to the prevailing party. The arbitrator’s award shall be final and binding and may

be entered in any court having jurisdiction thereof. The award of the arbitration shall,

unless otherwise mutually agreed by the parties, be accompanied by a statement of the

reasons upon which the award is based.

The following deadlines will apply and may be extended only by the

arbitrator in his or her sole discretion:

(i) Initial Prehearing Conference: The arbitrator shall convene and

conduct a prehearing conference no later than ten (10) calendar days following the

appointment of the single neutral arbitrator.

(ii) Award Deadline: The arbitrator shall issue his or her final award

no later than twenty (20) calendar days from the formal close of the proceedings (i.e., the

last day of testimony or the date set for receipt of the closing memoranda, whichever is

later).

(e) Material Inducement/Knowing Waiver. The Purchaser acknowledges that the

agreements to submit any Dispute to mediation and arbitration as provided in this Section

are a material inducement to the Seller to enter into this Agreement. Purchaser

acknowledges that, by agreeing to the provisions in this Section, Purchaser is waiving

Purchaser’s rights to a jury trial of any Dispute.

(f) Survival/Unit Deed. The provisions of this Section 15.3 shall survive the

Closing. Purchaser and Seller agree that similar provisions will be included in the Unit

Deed.

PURCHASER’S INITIAL(S) __________

ARTICLE XVI – MISCELLANEOUS PROVISIONS

29

16.1 Time of Essence. Time is of the essence of this Agreement.

16.2 Risk of Loss; Condemnation. Risk of loss on the Property and other improvements

shall be borne by Seller until the Closing Date or the date Purchaser takes possession,

whichever is earlier, and thereafter such risk of loss shall be borne by Purchaser. If there

is any taking by eminent domain (sometimes called condemnation) of the Property or any

part of the Property by any governmental entity prior to Closing, then, if there is a

complete taking, this Agreement shall be canceled and, if there is a partial taking,

Purchaser shall have the right to cancel this Agreement. If this Agreement is canceled,

Purchaser shall be entitled to a return of Purchaser’s Deposit less Cancellation Costs.

The foregoing is subject to the limitation that the taking of an easement or other limited

right with respect to the Property or Project which does not substantially interfere with or

reduce Purchaser’s practical enjoyment and use of the Property will not be grounds for

cancellation of this Agreement, nor shall the Purchase Price be reduced.

16.3 Hawaii’s Owner-Occupant Pre-sale Law. Under Hawaii’s condominium law, to

qualify as an owner-occupant purchaser, Purchaser must (among other things) sign an

Owner-Occupant Affidavit and be listed on Seller’s owner-occupant reservation list. If

Purchaser has signed and delivered an Owner-Occupant Affidavit, then the

representations Purchaser has made in the Affidavit are deemed to be part of this

Agreement and any breach of those representations shall constitute a default under this

Agreement. In the event of such default, Seller may exercise its default remedies

described in this Agreement.

16.4 Notices. Except as otherwise provided in this Agreement, all notices shall be in writing

and shall be given by personal delivery, U.S. mail (postage prepaid), or facsimile. Notice

to Seller shall be delivered either (a) by personal delivery to Seller’s address set forth in

this Agreement or to the Project Broker’s sales office located at 2829 Ala Kalanikaumaka

Street, Suite A-101, Koloa, Hawaii 96756 , as may be relocated from time to time; (b) by

mail to Seller’s address listed in this Agreement; (c) by facsimile to (480) 473-4684 or

(d) to such other address or facsimile number as Seller may designate from time to time.

Notices to Purchaser shall be delivered to Purchaser at the address or facsimile number

set forth in this Agreement. If there should be more than one person listed as Purchaser,

Purchaser shall notify Seller in writing which one of such persons is to receive any

notices, and notice given to the designated person shall be effective notice to all such

persons. If Purchaser shall not have designated which person is to receive notice, then

notification may be made to the first person listed as Purchaser in Article II, and such

notice shall be considered effective as to all. Notices will be deemed given when hand

delivered, deposited in the U.S. mail, or sent by facsimile transmission, as applicable.

16.5 Partial Invalidity. If any provision of this Agreement is declared illegal, void or

unenforceable, the remaining terms shall remain in full force and effect.

16.6 Joint Purchasers. If there is more than one person listed as Purchaser, each such person

will be fully responsible for fulfilling all of the promises and agreements of Purchaser

contained in this Agreement. Seller may enforce the rights of Seller under this Agreement

against each such person individually or against all of such persons together. This means

30

that any one of such persons may be required by Seller to pay all of the amounts owned

by Purchaser under this Agreement, or to keep all of Purchaser’s other promises and

agreements contained in this Agreement.

16.7 Applicable Law. This Agreement will be governed by and interpreted in accordance

with the laws of the State of Hawaii. Purchaser and Seller agree that any lawsuit to

enforce this Agreement will be brought only in the courts of the State of Hawaii,

including the State courts and the United Stated District Court for the District of Hawaii.

16.8 Survivability of Covenants and Indemnities. All covenants, terms and conditions

intended to survive the Closing or intended hereunder to be performed in whole or in part

after the conveyance of the Property to Purchaser, and all representations, warranties and

indemnities by one or more of the parties to any one or more of the other parties, shall

survive the conveyance of the Property and be binding upon and inure to the benefit of

the parties hereto and their respective heirs, personal representatives, successors and

assigns.

16.9 Trespass During Construction. Prior to delivery of possession of the Property to

Purchaser, Purchaser shall not trespass upon the Property or the Project site. Purchaser

hereby acknowledges that execution of this Agreement constitutes Purchaser’s agreement

to remain outside of any fenced or posted construction areas, and any other areas in

which ongoing work is being performed pending completion, and Purchaser agrees to

exert diligent effort to prohibit entry into such area by members of Purchaser’s

household, and by Purchaser’s tenants, lessees and invitees. Any entry onto the Property

or the Project site pending completion shall be at the risk of the Purchaser. Purchaser

hereby agrees to defend, indemnify and hold harmless Seller, other owners in the Project

and the employees, agents, contractors, successors and assigns, of any of them, from and

against any and all actions, liabilities, loss, damage, costs and expenses, including

attorneys’ fees and costs, incurred by Seller in connection with any such entry. Violation

of this Section 16.9 shall constitute a default by Purchaser under this Agreement.

16.10 Cooperation with Regulations from Governmental Departments. Purchaser agrees to

provide such information and complete such forms, surveys and documents as may be

deemed necessary or appropriate by Seller to comply with the requests or requirements of

any governmental agency, including but not limited to, completing any documents,

surveys, authorizations, or verifications necessary for Seller to evidence compliance with

the owner-occupant rules under HRS Chapter 514B. Purchaser also authorizes any

Purchaser’s lender to provide Seller or Project Broker with any and all information

necessary for this purpose.

16.11 Successors and Assigns. The terms “Purchaser” and “Seller” include the person(s)

named and their respective heirs, devisees, personal representatives, executors,

administrators, successors, and permitted assigns, as the case may be. The singular

includes the plural and vice versa and the use of any gender includes the other as

common sense shall require.

31

16.12 Attorneys’ Fees. In the event of any dispute arising out of this Agreement, the

prevailing party shall be entitled to reasonable attorneys’ fees.

16.13 Captions. The captions of the paragraphs of this Agreement are for convenience only

and do not limit the provisions contained therein.

16.14 Entire Agreement. This Agreement is the entire agreement between Seller and

Purchaser. Anything which Seller, including without limitation, Seller’s salesmen,

employees and agents, and Purchaser may have talked about in any previous negotiations,

any promise made, or any past understandings or agreement, whether orally or in writing,

is canceled if it is not set forth specifically in this Agreement. No changes in this

Agreement will be valid unless approved by Purchaser and Seller in writing.

16.15 Authority to Execute Agreement. Any person executing this Agreement on behalf of a

Purchaser, whether as an officer, member, partner, attorney-in-fact or otherwise,

represents and warrants that such person is duly authorized to execute and deliver this

Agreement.

32

EXHIBIT A

Schedule of Units

For Phase IA

UNIT

NO.

FLOOR

PLAN

TYPE

NO.

BEDROOMS/

BATHROOMS

NET

LIVING

AREA*

LANAI

AREA

(TOTAL)

OUTDOOR

SHOWER

AREA

(TOTAL)

ASSIGNED

COVERED

PARKING

STALL

3 D 3/3 1,658 sq. ft. 673 sq. ft. 89 sq. ft. P7

4 A 1/1 766 sq. ft. 394 sq. ft. 75 sq. ft. P6

5 AR 1/1 766 sq. ft. 394 sq. ft. 75 sq. ft. P5

6 B 2/2 1,113 sq. ft. 564 sq. ft. 85 sq. ft. P1

7 C 2/2 1,797 sq. ft. 582 sq. ft. 168 sq. ft. P2

*“Net Living Area” means the floor area of the unit measured from the interior surface of the

perimeter walls of the unit, notwithstanding that the Type B, C and D units include the entirety

of the perimeter walls. Other documents and maps, including the advertising materials, may give

floor area figures that differ from those above because a different method of determining the

floor area may have been used.

33

EXHIBIT B

LIST OF FURNISHINGS

34

EXHIBIT C

THE CLUB BUNGALOWS AT KUKUI‘ULA

PURCHASER AGREEMENT

(Assessments and Fees)

PURCHASER(S): ________________________________________ (“Purchaser”)

UNIT: Unit _____, The Club Bungalow at Kukui‘ula (the “Unit”)

Purchaser, in connection with its purchase of the Unit from Lodge Hale Development,

LLC, a Hawaii limited liability company (“Seller”), agrees as follows:

(a) Purchaser will be obligated to pay assessments and fees as a member of the

Association of Unit Owners of The Club Bungalows at Kukui`ula Association (the

“Association”).

(b) Purchaser will be obligated to pay assessments and fees as a Member of the

Kukui‘ula Community Association (the “Community Association”) and separate assessments

and fees as a Plantation Member of The Club at Kukui‘ula (“The Club”).

(c) Pursuant to separate documentation entered into between The Club and Purchaser

and not involving Seller, Purchaser may be eligible to apply for and purchase a Golf

Membership. For complete details, please contact the designated representative of The Club.

Purchaser acknowledges that the acquisition of a Golf Membership is an entirely separate

transaction from the purchase of the Unit and is not guaranteed by either Seller or The Club.

(c) The following amounts are the current fees and assessments for Purchaser’s Unit

in effect (and subject to change in accordance with the Governing Documents and Project

Documents):

• Community Association Capital Start-Up Fee. The “Capital Start-up Fee” as defined in

the Community Charter is a mandatory one-time fee payable by the initial owner of each

lot/unit (including Purchaser, but excluding the Declarant under the Community Charter

(“Declarant”) and excluding Seller), which fee is currently $1,600.00, and is due and

payable to the Community Association at the time of Closing.

• Community Association Base Assessment. The “Base Assessment” as defined in the

Community Charter is an assessment established by the Board of Governors (“Board”),

which is imposed upon the owner of each lot/unit (including Purchaser, but excluding

Declarant). Currently, the Base Assessment is $892.50/month ($10,710.00/year) per

lot/unit, which assessment could increase by 20% per year, provided that Hawaii law

does not mandate otherwise. Payment of the Base Assessment to the Community

Association shall commence upon Closing. Currently, the fees (which are annual fees)

are collected monthly; however, the Board has the right to change the method of

35

collection and could, for example, require that the fees be payable annually, quarterly or

semi-annually in advance.

• Plantation Membership (The Club) Initiation Fee. The “Initiation Fee” as defined in the

Club Covenant for the Plantation Membership is a mandatory one-time non-refundable

fee payable to The Club, currently $50,000.00 per lot/unit. The Initiation Fee is unrelated

to the use or non-use of golf and other facilities and is due and payable at the time of

Closing. If Purchaser resells the Property, the purchaser of the Property will also be

required to pay the Initiation Fee (then in effect) to The Club.

• Plantation Membership (The Club) Base Assessment. The “Regular Club Assessment”

as defined in the Club Covenant is currently $1,115.62/month ($13,387.44/year) per

lot/unit. Payment of the Regular Club Assessment to The Club shall commence upon

Closing. Currently, the fees (which are annual fees) are collected monthly; however, the

Board of Directors of The Club has the right to change the method of collection and

could, for example, require that the fees be payable annually, quarterly or semi-annually

in advance.

• The Club Bungalows at Kukui`ula Monthly Assessment. The Association, acting through

the Board, shall from time to time assess all Owners, in proportion to the Common

Interests appurtenant to their respective unit, for payment of the Common Expenses.

Purchaser shall become obligated for payment of such monthly assessment of

maintenance fees upon Closing. Prorations payable by Purchaser at Closing shall be

estimated by Escrow. Currently, the monthly assessment for maintenance fees on the

Unit is $_____________.

• The Club Bungalows at Kukui`ula Capital Start-Up Fee. An amount equal to two months

maintenance fees for the Unit in effect on the Closing Date, currently estimated as a total

of $______________

• Service Area, Specific, Special and Other Assessments. Purchaser acknowledges and

agrees that in addition to the above, other types of fees, dues and assessments may be

imposed upon Purchaser, in accordance with the Governing Documents. Such fees, dues

and assessments may be imposed under certain circumstances, including: (i) Service Area

Assessments for any Service Area Expenses attributable to any Service Area that the unit

may be within, as reflected in a future Supplemental Declaration of Covenants,

Conditions and Restrictions affecting the Property; (ii) Special Assessments, generally

imposed to cover unbudgeted expenses; (iii) Specific Assessments, imposed against one

or more individual lot owners to pay for special services to the lot/unit owner(s), or to

pay the costs of remedying violations by such owner(s) of the Governing Documents;

(iv) use and consumption fees, to cover the cost of optional services for which such fees

are imposed; (v) permit fees for special events; and (vi) sanction fees or penalties, in the

case of a violation of the Governing Documents.

The foregoing is a brief summary of various provisions in the Governing Documents and

Project Documents. Nothing contained herein shall limit or otherwise affect in any manner the

provisions of the Purchase Agreement pertaining to the Unit or the terms of the Governing

Documents or Project Documents, which should be reviewed in detail before the purchase of the

36

Unit. Capitalized words not otherwise defined herein shall have the meaning ascribed to them in

the Purchase Agreement to which this document is attached as an exhibit.

ACKNOWLEDGED AND AGREED:

PURCHASER(S):

______________________________________

______________________________________

Date: ________________________________

37

EXHIBIT D

Purchaser’s Acknowledgement of CFD Special Tax

COUNTY OF KAUA‘I, HAWAI‘I COMMUNITY FACILITIES DISTRICT NO. 2008-1

(KUKUI‘ULA DEVELOPMENT PROJECT) TO: THE PROSPECTIVE PURCHASER OF THE REAL PROPERTY KNOWN AS UNIT __ of The Club Bungalows at Kukui`ula condominium project, located on PARCEL FF (the “Unit”) located in multi-phased resort and residential community within the master planned area and known as “Kukui`ula” (the “Community”). THIS IS A NOTIFICATION TO YOU PRIOR TO YOUR ENTERING INTO A CONTRACT TO PURCHASE OR LEASE THIS UNIT.

(1) Pursuant to Ordinance No. 837, the Kaua‘i County Council authorized the formation of Communities Facilities District No. 2008-1 and established a CFD within the Community (the “Kukui`ula CFD”), thereby authorizing the issuance of bonds to be paid by special taxes levied within the Kukui`ula CFD, including the Unit. The Kukui`ula CFD special tax provides a partial reimbursement to developer of its costs to construct certain improvements benefiting the Community and the Kōloa-Po`ipu area.

(2) This Unit is subject to this special tax, which is in addition to the regular property taxes and

any other charges and benefit assessments on this Unit. This special tax is not imposed on all property within the County of Kaua‘i (the “County”), but only on taxable property within the Kukui`ula CFD. The Kukui`ula CFD special tax is included in your semi-annual or annual real property tax statements issued by the County and are to be paid as part of your real property tax payment to the County. If you fail to pay this special tax when due each year, this Unit may be foreclosed upon and sold by the County. This special tax is used to pay debt service on bonds issued to finance certain public facilities benefiting the Community and the Kōloa-Po`ipu area (including this Unit), and to pay administrative expenses of the Kukui`ula CFD. YOU SHOULD TAKE THIS SPECIAL TAX AND THE BENEFITS FROM THE PUBLIC FACILITIES FOR WHICH IT PAYS INTO ACCOUNT IN DECIDING WHETHER TO BUY THIS UNIT.

(3) This special tax for the District is an “ad valorem” tax, meaning that it is based on the value of the real property being taxed. The special tax is currently planned to be assessed as follows:

For years after 2013/14, the special tax rate will continue to increase by 2% per year through the term of the special tax. It is currently mandated by law that special taxes levied on residential property cannot increase by more than 2% per year. However, the law does allow, in certain circumstances, for increases of less than 2% per year in the special tax.

(4) The special tax rates will be applied on the value of the Unit, including any improvements

to the land (the “Improved Lot Value”), but excluding any portion of the value attributable to buildings. The Improved Lot Value is determined based on the purchase and sale agreement related to the Unit, any escrow statement, or other information provided by the seller or developer, or information otherwise available to the administrator of the Kukui`ula CFD, and will not increase or decrease after the close of escrow on the Unit. Once the Improved Lot Value has been determined, it will thereafter be fixed for the duration of the Kukui`ula CFD.

County CFD Tax Based on Land Value

Fiscal Year Preliminary Estimate of Maximum Tax Rate per $1,000 of Value (land only)

2012/13 3.33

2013/14 3.40

38

(5) The Kukui`ula CFD will exist only for so long as the special taxes are required to repay the bonds issued to finance the CFD improvements, described in the Ordinance of Formation on file with the County of Kaua‘i. While the maximum term for any single issuance of bonds is 30 years, it is expected that more than one series of bonds will be issued and, thus, it is expected that the Kukui`ula CFD will last until approximately 2058. If the Kukui`ula CFD is used to finance special improvements, then it must proceed through the legislative process, and the owner of the Unit would have the right to appear before the County Council to express owner’s views on the matter.

YOU MAY OBTAIN A COPY OF THE ORDINANCE OF FORMATION THAT AUTHORIZED CREATION OF COMMUNITY FACILITIES DISTRICT NO. 2008-1 (KUKUI‘ULA DEVELOPMENT PROJECT), AND THAT SPECIFIES MORE PRECISELY HOW THE SPECIAL TAX IS APPORTIONED AND HOW THE PROCEEDS OF THE TAX WILL BE USED FROM THE COUNTY CLERK BY CALLING (808) 241-6371. THERE MAY BE A CHARGE FOR THIS DOCUMENT NOT TO EXCEED THE ESTIMATED REASONABLE COST OF PROVIDING THE DOCUMENT. I (WE) ACKNOWLEDGE THAT I (WE) HAVE PURCHASED/LEASED THE UNIT DESCRIBED ABOVE AND PRIOR TO ENTERING INTO ANY CONTRACT TO PURCHASE THE UNIT HAVE RECEIVED AND READ A COPY OF THIS NOTICE.

Print Name:

Date:

Print Name:

Date:

Print Name:

Date:

Print Name:

Date:

Current Mailing Address: _____________________________

_____________________________

_____________________________

39

EXHIBIT E

WARRANTIES AND LIMITATIONS ON WARRANTIES DISCLOSURE

(a) Seller’s Assignment of Construction Defect Warranties. PURCHASER

ACKNOWLEDGES AND AGREES THAT, EXCEPT AS SPECIFICALLY PROVIDED

BELOW, SELLER IS NOT MAKING OR OFFERING ANY WARRANTIES, EXPRESS

OR IMPLIED, WITH RESPECT TO THE PROPERTY, INCLUDING, WITHOUT

LIMITATION, ANY WARRANTIES OF MERCHANTABILITY, HABITABILITY,

QUALITY OF CONSTRUCTION, OR FITNESS FOR A PARTICULAR PURPOSE. At

Closing, by execution and delivery of the Unit Deed, Seller shall assign to Purchaser any and

all of the construction defect warranties on the Property from the general contractor as set

forth in the construction contract between Seller and such general contractor for the Project,

which warranties will be in effect for a period expiring on the earlier of: (i) twelve (12)

months from the date of Closing of the sale of the Unit to Purchaser or (b) eighteen (18)

months after the date of the certificate of occupancy for the Unit purchased by Purchaser

(the “Construction Defect Warranties”). Seller shall provide reasonable assistance to

Purchaser in making any claim under the Construction Defect Warranties during the effective

period of any such warranties, provided that Seller shall have no further obligation nor any

liability with respect to the Construction Defect Warranties.

(b) Seller’s Assignment of Manufactures’ Warranties. Appliances, equipment, or other items

which are “consumer products” for purposes of the Magnuson-Moss Warranty Act, 15 USC

2301, et seq. are for convenience collectively called the “Consumer Products”. The Closing

of the purchase and sale of the Unit shall constitute Seller’s assignment to Purchaser of any

manufacturer’s warranties covering any Consumer Products which are incorporated into the

Property for the unexpired terms of such warranties, to the extent such warranties exist and to

the extent that Seller has the right and power to make such an assignment. Purchaser

acknowledges and understands that Seller is not stating that any such warranties exist, or that

such an assignment will be effective, nor is Seller adopting any such manufacturer's or

dealer's warranties or acting as a co-warrantor, but Seller is merely attempting to pass

through to Purchaser the benefits of any such warranties, if any exist. Purchaser shall follow

the procedure set forth in the manufacturer’s warranty if any defects should appear in that

item. Purchaser is aware that Purchaser is obligated to read and understand these warranties

and that any service request should be made directly to the service representative for the

manufacturer. Consumer Products are excluded from the Limited Warranty described below,

and Seller makes no warranties and does not assume any obligation to service or repair the

Consumer Products. Seller makes no representation or warranty with respect to the energy

consumption of, or efficiency of, any appliance, equipment, or consumer product, or with

respect to energy or utility costs.

(c) Warranty by Seller. Seller warrants that the items listed below will be free from Cosmetic

Flaws on the Date of Closing, subject to the terms and conditions of this subsection (c).

“Cosmetic Flaw” means a material flaw in the appearance of an item (as opposed to a

structural or other construction defect) which is readily visible, exceeds normal tolerances,

and is substantial enough to affect the overall appearance of and materially affect the market

40

value of the item. An obscured or minor flaw is considered to be of no consequence and to be

within building industry standards and is not considered a Cosmetic Flaw.

Following substantial completion of the Property, a walk-through of the Property (“Walk-

through”) by the Purchaser or a representative designated by the Purchaser in writing

(“Purchaser’s Representative”) will be scheduled by Seller. Any Cosmetic Flaws must be

recorded during the Walk-through on the report (the “Defect Report”) to be signed by

Purchaser or Purchaser’s Representative immediately following the Walk-through. Seller

will promptly correct any Cosmetic Flaws that are recorded on the Defect Report. Seller will

not have any obligation to correct any claimed Cosmetic Flaw not noted on the Defect

Report. Without limitation, Purchaser (or Purchaser’s Representative) must carefully

inspect the following items during the Walk-through as damage to the items can occur

easily during move-in and, therefore, will not be warranted after Purchaser takes

possession of the Property:

Bathroom fixtures and finishes, towel bars, rings, toilet paper dispensers, bathtub and sink

finishes, cabinets, ceramic floor tile, counter top tile, cultured marble, plastic laminate, solid

surface, marble or granite surface counter tops, door and cabinet handles, vinyl, stone, tile,

carpet or laminate floor coverings, tub and shower units, lighting fixtures, luminous lighting

panels, mirrors and medicine cabinets, plumbing fixtures, drywall, handrails, window

screens, frames and glass, doors and door trim, and appliance finishes.

(d) Limitations of Warranty and Seller Liability.

THIS IS AN IMPORTANT PROVISION AND PURCHASER IS URGED TO READ IT

CAREFULLY. PURCHASER IS ALSO ADVISED TO SEEK LEGAL ADVICE IF

PURCHASER DOES NOT UNDERSTAND WHAT THIS PROVISION MEANS.

THE WARRANTIES DISCUSSED ABOVE ARE BEING PROVIDED TO PURCHASER

IN LIEU OF ANY OTHER EXPRESS OR IMPLIED WARRANTY BY SELLER.

EXCEPT FOR SUCH SPECIFIED WARRANTIES, SELLER NEITHER MAKES NOR

GIVES ANY OTHER WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE

PROPERTY OR PROJECT, AND PURCHASER ACKNOWLEDGES AND AGREES

THAT SELLER IS NOT MAKING OR GIVING ANY EXPRESS OR IMPLIED

WARRANTY, OTHER THAN THE SPECIFIED WARRANTIES.

WITHOUT LIMITING THE FOREGOING, SELLER DOES NOT MAKE AND

EXPRESSLY DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTY OF

HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,

OR WORKMANSHIP, OR THAT THE PROPERTY AND PROJECT ARE FREE FROM

DEFECTS. THIS PROVISION SHALL SURVIVE THE CLOSING.

EXCEPT AS PROVIDED ABOVE WITH RESPECT TO COSMETIC FLAWS,

PURCHASER GIVES UP, WAIVES AND RELINQUISHES ALL RIGHTS TO ASSERT

ANY CLAIM, DEMAND, PROCEEDING OR LAWSUIT OF ANY KIND AGAINST

SELLER WITH RESPECT TO THE CONDITION OF THE PROPERTY, THE UNIT, THE

41

PROJECT, THE COMMON ELEMENTS AND LIMITED COMMON ELEMENTS, ANY

PERSONAL PROPERTY, AND ANY CONSTRUCTION DEFECTS.

(e) Notice of Contractor’s Rights to Resolve Alleged Construction Defects.

CHAPTER 672E OF THE HAWAII REVISED STATUES CONTAINS IMPORTANT

REQUIREMENTS YOU MUST FOLLOW BEFORE YOU MAY FILE A LAWSUIT

OR OTHER ACTION FOR DEFECTIVE CONSTRUCTION AGAINST THE

CONTRACTOR WHO DESIGNED, REPAIRED, OR CONSTRUCTED YOUR

HOME OR FACILITY. NINETY DAYS BEFORE YOU FILE YOUR LAWSUIT OR

OTHER ACTION, YOU MUST SERVE ON THE CONTRACTOR A WRITTEN

NOTICE OF ANY CONSTRUCTION CONDITIONS YOU ALLEGE ARE

DEFECTIVE. UNDER THE LAW, A CONTRACTOR HAS THE OPPORTUNITY

TO MAKE AN OFFER TO REPAIR AND/OR PAY FOR THE DEFECTS. YOU ARE

NOT OBLIGATED TO ACCEPT ANY OFFER MADE BY A CONTRACTOR.

THERE ARE STRICT DEADLINES AND PROCEDURES UNDER THE LAW, AND

FAILURE TO FOLLOW THEM MAY NEGATIVELY AFFECT YOUR ABILITY TO

FILE A LAWSUIT OR OTHER ACTION.

42

EXHIBIT F

THE CLUB BUNGALOWS AT KUKUI`ULA

Non-Investment Addendum

Unit No. ________

This Addendum shall be part of and included in that certain The Club Bungalows at Kukui’ula

Phase IA Condominium Purchase Agreement ("Sales Contract"), reference dated

_____________________, by and between Lodge Hale Development, LLC, a Hawaii limited

liability company, ("Seller") and _______________________________ ("Purchaser) relating to

the sale of Unit No. ________ (the "Property") at Koloa, Kauai. Capitalized terms used herein,

unless otherwise defined herein, shall have the meanings given to them in the Sales Contract.

No Future Profit Reliance. PURCHASER ACKNOWLEDGES, WARRANTS AND

REPRESENTS THAT NEITHER SELLER NOR ANY OF ITS OFFICERS, EMPLOYEES,

AGENTS OR REPRESENTATIVES HAS MADE ANY REPRESENTATION, OR

PROVIDED FORECASTS OR PROJECTIONS, CONCERNING POTENTIAL FOR FUTURE

PROFIT, RENTAL INCOME POTENTIAL, TAX ADVANTAGES, OR INVESTMENT

POTENTIAL OF THE PROPERTY. PURCHASER HEREBY FURTHER ACKNOWLEDGES

AND WARRANTS THAT PURCHASER IS ENTERING INTO THE SALES CONTRACT

BASED UPON PURCHASER'S INTENDED USE AND ENJOYMENT OF THE PROPERTY,

AND UPON BUYER’S INDEPENDENT ASSESSMENT OF THE ECONOMIC POTENTIAL

OF THE PROPERTY AND,WITHOUT RELIANCE UPON ANY REPRESENTATIONS BY

OR ON BEHALF OF SELLER WITH RESPECT TO THE ECONOMIC POTENTIAL, AND

THATN THE AVAILABILITY OF ANY RENTAL PROGRAM WAS NOT AN

INDUCEMENT TO PURCHASE THE PROPERTY.

No Rental Representations. PURCHASER HEREBY ACKNOWLEDGES AND AGREES

THAT: (A) SELLER AND ITS AGENTS ARE NOT MAKING ANY REPRESENTATIONS

AS TO THE FEASIBILITY OF GENERATING INCOME OR DERIVING ANY OTHER

ECONOMIC OR INCOME TAX BENEFIT FROM OWNERSHIP OF THE PROPERTY; (B)

SELLER AND ITS AGENTS HAVE MADE NO REPRESENTATIONS (NOR IS ANYONE

AUTHORIZED TO DO SO) CONTRARY TO THIS ADDENDUM OR THE SALES

CONTRACT WITH RESPECT TO THE TAX TREATMENT OR ANY OTHER ECONOMIC

BENEFIT OR CONSEQUENCE RELATING TO THE PURCHASE OF THE PROPERTY;

AND (C) SELLER MAY, AS A CONDITION OF CLOSING, REQUIRE OF PURCHASER,

ANY BROKERS INVOLVED IN THE SALE OR AGENTS OF SUCH BROKERS, OR

ANYONE ELSE CONNECTED IN ANY WAY WITH THE OFFER TO SELL AND

PURCHASE THE PROPERTY, THE EXECUTION AND DELIVERY TO SELLER OF SUCH

WAIVERS, AFFIDAVITS, OR OTHER DOCUMENTS AS MAY FROM TIME TO TIME BE

REQUIRED BY SELLER TO SATISFY SELLER THAT THE OFFER TO SELL AND THE

PURCHASE OF THE PROPERTY ARE NOT IN VIOLATION OF ANY FEDERAL OR

STATE SECURITIES LAWS OR REGULATIONS.

The terms of this Non-Investment Addendum shall survive closing and conveyance of the

Property to Purchaser.

[Signature Page Follows]

43

The undersigned acknowledges receipt of a fully completed copy of this Addendum.

Date:

Date:

ACCEPTED BY SELLER:

LODGE HALE DEVELOPMENT, LLC, a

Hawaii limited liability company

By

Its

Date:

By

Its

Date: